West Mids Buy To Let & Commercial Property Outlook

18 April 2016

Prices for Buy to Let and commercial property in the West Midlands look set to rise in the next five years according to a poll of finance brokers and business advisers by the niche property bank Cambridge & Counties.

West Midlands brokers, surveyors, accountants and lawyers took part in the survey by the Bank at the event marking the opening of its first Birmingham office.

Asked about Buy to Let residential property values, the majority are expecting prices to remain roughly flat in the next 12 months. A third predict a significant rise.

Over the next five years, the majority expect an increase in prices and more than a quarter are anticipating values to rise by at least 10 per cent.

Looking at commercial properties, the picture is even more positive. No-one is expecting prices to fall in the next 12 months and more than 80 per cent expect a rise. The five-year outlook sees a third expecting at least a 10 per cent rise.

In his Budget last week, the Chancellor George Osborne announced changes to Stamp Duty Land Tax for commercial property, with almost half of buyers who pay the tax facing lower bills. Nine per cent – those paying more than £1.05 million for a property – will pay more.

Neil Reddington, Cambridge & Counties director of business development for the West Midlands, said:

“We’ve come to the heart of the West Midlands to lend money to investors and businesses which own their premises, so it is very encouraging that finance and property professionals in the region have confidence in the market.”

Lisa Williams, managing director of property finance specialists Keys (UK), based in Coventry, said:

“I think we will see an increased interest in commercial property investment over the coming years. All types of investor still need somewhere to put their money and after the Government’s attack on residential landlords they will look for other havens.

“Investors will retain the mortgage interest relief on commercial property, Stamp Duty Land Tax and Corporate Gains Tax is unchanged on commercial and as such this is likely to be where many put their money.

"Whether this can be supported by the demand for tenants, however, is another matter. As I’ve always said a tenant who wants a three bed house will compromise with a two bed, but a tenant who needs an office can’t compromise with a factory.”

The brokers and other advisers were asked about how easy it will be to access finance for the businesses they work for. A majority expect the situation to improve, but sentiment is warmer for the next six to 12 months than for the longer term. Their customers are largely confident about their business prospects.

The survey also asked which city, Birmingham or London, will benefit more from the HS2 railway – the response was 2:1 in favour of Birmingham.

Birmingham is Cambridge & Counties fifth office – joining Leicester, Cambridge, Sheffield and Bristol. The Bank began 2016 having lent more than £425 million to small and medium sized businesses and experienced property investors.

Cambridge & Counties Bank’s Birmingham office is at Colmore Plaza, 20 Colmore Circus, Birmingham B4 6AT and the telephone number is 0121 796 6820.