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The future for commercial property investment in Birmingham

by | Jun 16, 2016 | Clients, News

We were invited by the Birmingham Business Post to share our views on commercial investment and buy-to-let in Birmingham. You can read the full article below, or see the original on the Birmingham Business Post site.

Commercial property finance plays a huge role in supporting and enabling business growth across Birmingham and throughout the West Midlands. In this article, Karl Griggs, of CPC Finance, rounds up the current trends in the sector and focuses on…

The future for commercial property investment in Birmingham

The UK commercial property investment market has seen strong interest from both UK and foreign investors over the last few years.

At the end of 2015, investment volumes totalled £71 million, according to recent figures quoted in Money Observer magazine. However, as some expect the investment property market to stagnate in London, both UK and foreign property investors are looking around at regional cities such as Birmingham, Bristol, Manchester or Leeds. According to the latest Who Owns Central Birmingham report by Bilfinger GVA, in 2015 UK investors accounted for over 58 per cent of investment in the Birmingham office market.

At the same time the Birmingham residential buy-to-let market is flourishing. Recently, before the introduction of Stamp Duty on 1st April, new rental advertising for properties in the city region was up 49.9 per cent – that is more than double the rate of increase seen even in London which only achieved a spike of 19.4 per cent.

“The focus for investment is shifting,” said Karl Griggs from commercial finance specialist CPC Finance, “as the property investment market has been plateauing in London, both UK and foreign property investors are looking at regional cities such as Birmingham.

“Although, as we all know, the general landscape is not the most hospitable for property investors at the moment, there is still potential in places like Birmingham. This is particularly the case with upcoming investment in the city and surrounding infrastructure such as Birmingham Council’s City Centre Masterplan and the HS2. These will give new impetus to the trend of businesses looking outside London to get the maximum from their property investments, not only in terms of the quality and size of their properties, but also the scope of those investments.”

One particular area which CPC Finance sees as offering rich potential in this region is semi-commercial property, such as shops with flats above – particularly as these mixed-use properties fall outside the new stamp duty regime.

Relaxation of conditions governing the conversions of former shops into residential accommodation, initially introduced temporarily, has also now been made permanent, which makes this another area for investors to look in to.

“The government has been worried that the buy-to-let market has been getting out of control, but there are still plenty of ways in which an investment in commercial or residential property can be worthwhile,” said Karl.

“At CPC Finance, we specialise in helping people gain access to the money they need for investments. This will help meet the demand for homes and office space, which will be seen leading up to 2026 and beyond, once it becomes possible to travel between Birmingham and London in less than an hour. As the city grows there will always be a need both for commercial real estate for businesses to occupy and buy-to-let properties to accommodate the workers within.” Karl concluded.

If you are looking to invest in commercial or buy-to-let property in the Birmingham region and need funding, talk to CPC Finance about the options available by calling 01923 655441 or emailing contact@cpcfinance.co.uk.