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What will this year's property trends be in Birmingham?


I had an interesting chat with a local landlord over the Christmas period, we got talking about the Birmingham property market and thought other landlords might be interested in our discussion….


Property values didn’t start leaping forward in Birmingham until January 2013, so after a strong run over the last 24 or so months, the ever upward drive of house price rises has started to turn with increases now at an almost standstill for the first time since the start of 2013.


Now it could be said this easing of the housing market in Bimingham can be attributed partly to the time of year (in 2014 property values in West Midlands dropped by 4.2% during Novemer-December, but jumped to a 12% increase in Jan/Feb 2014), this would suggest that estate agents in Birmingham have some concerns about the direction of the market as a result of the not as strong demand and fewer house sales.


We are now faced with a general election on the horizon combined with the uncertainty of a possible interest rate rise, new mortgage rules and recent warnings of a house price bubble.


With this said, the main indicators suggest that buyers will start to gain the upper hand, especially with the new stamp duty rules announced recently by George Osborne. However, there are many homeowners who don’t need to sell and won’t bother unless it’s economically beneficial to do so, as most homeowners are homebuyers, so what they lose with one they gain with another.


This is all good news for landlords looking to buy rental property with the changes in stamp duty and later in 2015, the new rules regarding pensions, where you will be able to take money out of your pension pot to invest in property. However, at the same time, I would say don’t just buy any old property in Birmingham. First time landlords need to be cautious.

Bearing in mind, house prices double on average every ten years and the property market is shifting with more properties being built and restrictions put on mortgage lending, the likelihood of the property market increasing at the same levels as the past are questionable.


But investing in property is also about receiving the rent.


On the one hand going for high yielding Birmingham property to rent out seems an obvious choice, but high yielding property often doesn’t go up in value that well and in some circumstances doesn’t keep up with inflation, meaning in real terms you may end up with a depreciating asset, so surely you should pick a property that has great capital growth then, because of the obvious potential to generate long term capital profit, especially with inflation eating away at our savings. However, rental yields on high capital growth properties (in areas such as Great Barr, Sutton Coldfield, Streetly) tend to be low, meaning if you are taking a high percentage mortgage, the rent doesn’t pay the mortgage payments.


In response to these implications and demand for knowledge and advise, in the New Year we will be running a number of informal Landlord Seminars for new and existing Birmingham landlords, irrespective of whether you are already a client of ours, a self managing landlord, landlords with other agents, or simply thinking of becoming a new buy to let landlord in Birmingham for the first time in 2015.



If you would like some advice on property investment, be you a landlord with a portfolio or someone looking for their first buy to let property, please come and see me in my office on the Kingstanding Rd or drop me an email

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