Halifax “The annual % change in Q2 2017 for the West Midlands is +0.3%.”Halifax “The annual % change in Q2 2017 for the West Midlands is +0.3%.”
LSL Acadata HPI “Annual growth for the West Midlands in June was 3.3%.”
Source: UK HPI
Pretty much every property investment company claims they can offer properties ‘at a discount’ in the West Midlands and this data shows why. Property in this area ‘on average’ is good value and, although overall prices are currently rising, the level of increases haven’t been very high since the credit crunch. There is pretty much something for every purse in the West Midlands – with an average of £185,000, that means a 5% deposit required of UNDER £10,000 and a 95% mortgage would cost just £750 on a repayment basis, not far off the average rent of £600-700 a month. For those needing to spend less, flats are available for less than £100,000 and, although property prices are growing, they are still doing so at a lower rate since 2000 and have only grown just over 1% per annum in the last 10 years. No wonder property investment companies love to claim there are ‘bargains’ available – there are, but you can find them without spending a fortune on ‘property mentoring or sourcing’.
LSL Acadata HPI “Every region in the UK still shows annual growth, however they all slowed in June. The biggest drops in annual growth were in Wales, the West Midlands, down 1.3% to 3.3%, and Yorkshire & Humber and the South East.” (Jul 17)LSL Acadata HPI “Every region in the UK still shows annual growth, however they all slowed in June. The biggest drops in annual growth were in Wales, the West Midlands, down 1.3% to 3.3%, and Yorkshire & Humber and the South East.” (Jul 17)
Hometrack “Birmingham is the fastest growing city (8.0%, up from 6.8% in July 2016). The rate of growth has been consistent over the last year and trending upwards on sustained demand, a lack of homes for sale and attractive affordability.” (Jul 17)
Source: UK HPI
Interestingly in the West Midlands, the average £155,000 that first-time buyers are spending isn’t that different to the region’s overall average of £185,000. In contrast, new build properties are selling at a quite a premium; reaching £267,000. Overall with key cities of Coventry and Birmingham, both are doing well for price growth, with relatively buoyant economies. According to Hometrack, low stock levels coupled with affordable homes to buy is keeping prices buoyant when areas such as London and the South have slowed.
Moving forward, property price forecasts look to be some of the highest in the country; the UK average is expected to be around 13-14%, while prices in the West Midlands are predicted to rise by anything from 13-18%, likely to depend very much on the property type and location. However, buyers, sellers and home owners shouldn’t rely on this growth for the future as I expect it will be very patchy and investors need to make sure they build in capital growth from the start and be very wary of those offering ‘below market value deals’ in the West Midlands area.
The rental market is performing OK in the region. Rents are pretty good value for money, with the indices showing rents varying from £550 a month through to just under £750. Rental inflation is not the ‘sky high’ levels often suggested by anti-landlord groups with all indices – including the government’s ONS – showing rental rises of sub 2% a year. This is good news for tenants as it suggests there is a relatively good demand versus supply situation which is keeping rents reasonably competitive.
For more, download our comprehensive West Midlands regional property report.
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