Regeneration in Birmingham continues to transform the city, and residential new-builds are still flying off the market as investor and homebuyer appetite remains strong.
Birmingham is one of the leading cities in terms of its regeneration and redevelopment prospects right now, and this has been further driven ahead thanks to this year’s Commonwealth Games as well as the impending arrival of HS2.
The city’s new-build market is performing particularly strongly at the moment as multiple new developments are set to be built, or are underway, as part of the future vision for the city. As such, developers are seeing positive business performance in the area with high demand creating competition for property.
According to recent research from Unlatch, there are a number of new-build hotspots coming up on the radars of property investors and developers alike, where demand for newly built properties is particularly acute. What’s more, buyers are willing to pay a premium to get a foot onto the Birmingham investment ladder.
Cost difference between new-build and existing
According to Unlatch’s data, brand-new properties in the UK as a whole sell for an average of £261 per square foot, while existing homes tend to sell for an average of £236 per square foot – an 11% price difference.
This difference is even more pronounced in Birmingham, but the research shows that this varies widely depending on the specific postcode. This could be down to the fact that some of the key areas undergoing regeneration at the moment have a high number of newly built properties being built and sold.
In Birmingham’s popular Jewellery Quarter, which falls under the B18 postcode, existing properties sell for an average £191, while the location’s new-builds sell for an average £386 per square foot. This represents huge price gap of 102.1%.
The next most popular postcode when it comes to new-build premiums is B32, which is west of the city. There, the difference in price between a new home and an old one is 71.6% on average. New-builds are priced at around £338 per square foot, while existing properties are £197 per square foot.
Other areas that were notable in the study for their price differences were B11 (70.1%), B16 (61.6%), B12 (52.3%), B66 (49.7%), B20 (46.5%), B26 (45.7), B71 (44.9%), and B31 (39.7%).
Eager buyers in Birmingham
Lee Martin, head of UK for Unlatch, said: “Birmingham is currently benefiting from major regeneration – inspired in no small part by the recent Commonwealth Games – with exciting projects found all over the city.
“This means that there is a healthy level of new-build stock and plenty of eager buyers looking to snap it up, with these new homes commanding a healthy premium for housebuilders focusing their efforts in the right areas.”
In terms of property investment, Birmingham remains one of the most intriguing places for investors at the moment. A study by Simply Business earlier this year found that the West Midlands city had seen the biggest growth in the country of property investors targeting the area.
The research was based on an increase in the number of insurance policies taken out by landlords. It found that there was a 14.6% rise between 2020 and 2021. It was well ahead of London, which came in seventh position on the list with a 10.3% rise over the period.
Alan Thomas, UK CEO at Simply Business, says: “The pandemic has contributed to a reshaping of the UK rental market. With rising house prices and an increase in average rent, there have been slower levels of growth in buy-to-let investment across the capital.
“Instead, many landlords are now looking to other areas – particularly those with a high student population – where they can attract a greater rental yield.”