London investors are increasingly showing up at Midlands auctions looking for bargains, according to an expert.
Jai Najran, a solicitor at Clark Brookes Turner Cary, the law firm with offices in West Bromwich and Stratford-upon-Avon, said value for money was the attraction.
Mr Najran, an expert on the auction legal process who can be regularly found attending local auctions, said:
“Rich pickings at competitive prices are what they are after.
Prices are through the roof in London and the South-east on both the commercial and residential sectors. As a result canny investors have begun to question continuing to put their money into the capital.
Increasingly Birmingham is seen as somewhere deserving of consideration that can produce strong returns.
We are seeing auctions absolutely packed out, with people barely able to get into the venue and the hammer often coming down on bids in excess of the asking price. Local property groups have made excellent returns from working the market – now London investors want in on the act. Confidence breeds confidence.
You see new faces, have a dialogue with them and often find there is a South-east connection.”
He said they would often pay somewhat over the odds, perhaps £20,000 to £30,000 above what might have been expected, but that was because in their terms returns were typically 8-9 per cent rather than the 4-5 per cent in the capital.
“From their perspective they are getting a better deal so it is a win-win all round.”
Mr Najran said Birmingham’s property reputation was building on the back of a thriving local economy.
Jobs were being created in their thousands by the likes of Jaguar Land Rover and bank back offices switching out of the capital. Construction activity was high and retail buoyant.
“Investors see so many new buildings going up in the city centre be it Snow Hill, the Paradise Circus redevelopment, Arena Central, the Mailbox re-invention, and the New Street Station makeover including John Lewis.
They see institutions snapping up these projects, sometimes ahead of completion. It is these sort of things, plus the prospect of HS2 high speed rail shortening connection times, which is encouraging London investors to assess the opportunities available at Midlands auctions.
Birmingham is the nation’s Second City and a natural first point of call for those venturing outside the capital.”