Rising stock levels of City apartments for sale impact prices

The Birmingham City Centre residential resale market is currently having a price check. Through the last year and aided by the July election, we have seen steadily increasing numbers of apartments coming to the market for sale, with a sales market not absorbing the available stock level. My colleagues are currently valuing five or more apartments per day with 50% of these making the decision to now sell.

This volume has been impacted further by several issues. For investor buyers, which comprise over 70% of the market, the change of Government has encouraged some existing landlords to consider selling. The Chancellors Autumn budget raising Stamp Duty for investor second home buyers, with the further threat of rising Capital Gains Tax through the new Labour term has pushed further caution into many of those existing & new buyers who might have looked to acquire a investment or further investment in this rejuvenating city. The sales market, alongside the normal supply coming from owner occupiers, is also receiving lumps of supply from those blocks affected by the Grenfell Tower fire of 2019, with its consequent cladding issues for high rise buildings. Some of these buildings are finally being issued their certification allowing the apartments to be sold to those needing mortgages, meaning a pent-up supply is becoming available.

The recent Rightmove statistics flag that currently there are 1284 apartments for sale in the City Centre with 345 of these in the Jewellery Quarter

For vendors, used to regularly reading about rising UK house prices, this local market, which is not unlike those in other key UK cities such as Leeds, Manchester & Liverpool, is difficult to comprehend. Notwithstanding our competitive pricing for vendors who instruct us we have just asked many of our client list to reduce their asking prices in recent days by 10% to ensure their stock properly competes against the large volume of apartments now available for those buyers who are looking. Whilst bold the uncomfortable truth otherwise is having ones apartment languishing on the sale market being overlooked by buyers being tempted elsewhere

The City Centre rental market continues to be resilient with high numbers of potential tenants looking and prices staying firm. For those searching to buy, the reality of improving yields can only be helpful, for tenants the alternative to rent is to buy and the lowering of prices can only assist, however the threat of the stamp duty threshold decreasing in April would urge us to advise first time buyers to who are actively searching to secure a property sooner rather than later.

For existing vendors, the opportunity to let is always there offering immediate income if they want to step out of the market for the Labour term or longer.