Property development in Birmingham
Despite the obvious challenges of 2020, property development activity remains strong across the UK’s second most populous city, and cranes continue to fill Birmingham’s skyline. Throughout the pandemic developers have been pushing forward with schemes, contributing to a healthy and exciting development pipeline.
Regenerating the city
The buzz surrounding 2022’s Commonwealth Games, and the arrival of the high speed rail network HS2, means Birmingham is continuing to attract significant investment, as well as demand for housing, as young professionals and families flock to the city for its employment opportunities and affordability.
HS2 has been dubbed the UK’s most important infrastructural development in a generation. It is set to revolutionise connectivity between Birmingham and 8 of the UK’s major cities, including Manchester, Sheffield and Leeds, whilst reducing the commute time to London to just 49 minutes, and transporting an estimated 26,000 people per hour.
£724 million will also be invested in the area surrounding Birmingham’s Curzon Street Station, with an ambition to create 36,000 jobs, 4,000 new homes, and 600,000 square metres of commercial development. Due for completion in 2026, it will coincide with the completion of Paradise, a 1.8 million sq. ft mixed-use development, comprising commercial, retail, leisure and hotel space.
A £700 million project in its own right, it’s another mammoth investment for the city, and such ambitious regeneration plans can only mean increased interest and confidence in the city, translating to plenty of opportunity for the property development industry.
Types of Birmingham property development
Residential was undoubtedly the standout sector for property development in Birmingham in 2020, with completion at a 10-year-high. According to the Deloitte Crane Survey, 2,072 units were brought to fruition, which is well above the city’s average for the past decade (607 per year), and 2021’s pipeline looks healthier still. With house price inflation in Birmingham remaining steady (+4.2% YoY vs national average of 4.3%), developers are confident that the housing shortage and the city’s ever popular appeal will continue to drive demand.
Development of student accommodation also reached a record high, with 1,458 units completed, well above the 10-year average. The largest of those was Lancaster Circus in Eastside, delivering 1,023 units, followed by Altura, a £41.5m scheme in Westside, providing a mixture of 435 ensuite clusters and individual studios, complete with retail units, a gym and communal social and study areas. The picture however looks very different going forward, as uncertainty due to Covid-19 reigns over students and universities, reflected by a much weaker pipeline for 2021, with just 399 beds currently planned for the year.
Office space was one of the casualties of the pandemic in Birmingham in 2020, with 520,000 sq. feet of office space planned for completion, and less than half of that delivered. This was a huge 75% drop in completion from 2019’s record year, as construction stalled and caused inevitable delays, although completion for all those schemes is now expected this year. Looking to the positives, over 1 million sq. ft of office space is still under construction, of which 51% is already pre-let, and 11,700 new businesses were registered in Birmingham last year, the highest number after London, showing the city’s entrepreneurial spirit is still going strong.
2020 property development schemes in numbers
Information provided by the Deloitte Birmingham Crane Survey 2020
Ground-up development pipeline
Opportunity for developers in Birmingham
Whilst the pandemic has undeniably had a significant effect on property development in Birmingham, it’s clear that there’s a huge amount of opportunity going forward. It’s a great time to be a property developer, if you have access to the right development finance, which is often one of the key barriers to success for SME developers.
Property development finance is a short-term loan used to fund construction or refurbishment projects. It’s a good idea to take out a loan because using someone else’s money is always cheaper that using your own, unless you’re sitting on a huge pile of cash. Access to more funds also means you can take on bigger projects that might otherwise be unrealistic, and run several schemes simultaneously or before one has sold, increasing your portfolio and profits.
How to finance property development in Birmingham
The development finance market is a fragmented one, and it’s difficult to know where to start in your search for a loan. Brickflow solves this challenge by providing instant online access to development finance. Here’s our latest list of trusted lenders.
We search the market in real-time, providing loans from lenders we know and trust, empowering you to borrow smarter, mobilise quicker and get ahead of the game. It’s the developers who can secure quality finance quickly, who will ultimately reap the benefits of the most competitive development opportunities in Birmingham, and further afield.
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