House price increases in Birmingham city centre are expected to outpace the UK over the next five years, driven by the increasing appetite for city centre living.
Prices are expected to rise by 21.7% in the next five years, compared with a UK average of 13.1%. However although Birmingham’s rental prices have increased more quickly than the UK in the last three years, the forecasts expect it to track the UK.
“Perhaps the greatest housing market changes over the past 10-15 years have been around city centre living and renting,” said Richard Roberts, Birmingham head of residential for JLL, which produced the forecasts.
“Our analysis, judgement and forecasts suggest that residential property performance will be stronger in city centres than in traditional housing in out of town locations.
“This derives from a complete turnaround in the appetite, desire and view towards city centre living.”
He said the main issue facing the market is “a lack of supply of quality development sites to satisfy demand”.
This is being exacerbated by Birmingham’s status as one of the youngest cities in Europe, which is expected to continue to fuel demand in the city centre, and cause prices to rise.
Roberts is also expecting the emerging Private Rented Community (PRC) developments – such as Exchange Square and Pershore schemes – to be part of a growing trend as developers cater to the additional amenities increasingly expected by would-be city centre residents.
He said: “Progress has been slow but is now gathering momentum and Birmingham is one of the leading beneficiaries, with a number of specialist PRC developments set to be delivered over the next few years.”
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