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  • In the Spotlight

    Birmingham being saturated by foreign buyers

    Good to see that Gideon Osborne's anti PRS measures are helping first time buyers.

    From today's Times

    First-time buyers are being priced out of Birmingham as investors from the Far East buy up swathes of new developments in the UK’s second largest city.

    Foreign investors are cashing in on the city’s multibillion-pound regeneration and the opportunity to rent to the youngest city population in western Europe.

    In recent years Birmingham has become the most popular destination for those moving out of London and 40 per cent of its residents are aged under 25.

    While London and Manchester were previously the prime targets for foreign investors there has been a surge in interest in Birmingham, with overseas buyers snapping up as many as 100 flats each in new developments.

    As well as the promise of huge yields renting to young people, investors are being lured by glossy brochures boasting that Birmingham is “one of the greenest [cities] in the UK” has “more miles of canals than Venice” and is home to the “iconic” Bullring. Another developer, whose conversion of a factory in the trendy Digbeth area is being marketed in Hong Kong, promises almost guaranteed rental income.

    Seven Capital, which is behind numerous developments in the city, is telling investors that demand from tenants is so high that some properties are being let on the same day they are purchased.

    The developer’s 105 Broad Street is being marketed in China, with the option to buy up to 19 flats at a time. When The Times purchased the records of 30 flats at random, 22 had been bought by overseas buyers, with eight from Hong Kong, 11 from Qatar and one each from Singapore, Oman and Dubai. Of the owners based in the UK, only two were listed as living in the apartments. Seven Capital would not provide the full breakdown of sales but said that more than 60 per cent of its properties were sold to UK residents and that it provided for “investors and homeowners alike.”

    Among those behind developments in the city is the Hong Kong-based Top Capital Group. The group’s homepage features the city’s Bullring, Victoria Square and library and its brochure for the 304-flatt Arden Gate development describes it as a “leafy city” with the potential for secure income from young renters.

    Florian Loloum, head of sales at the group, said that while previously only a few overseas investors had heard of Birmingham, the city was now seen as a safe investment. He said that the main interest came from Hong Kong and Singapore and investors in the Far East were selling properties in the UK to buy in Birmingham.

    Mark Evans, of Knight Frank, the property agents, said that in the past year he had seen “an increased appetite from investors in the Far East into Birmingham”.

    However, Paula Higgins, from the Homeowners Alliance, said she was worried that the trend in Birmingham was another example of properties being built to maximise profit rather than benefit those looking for homes.

    “Investing in bricks and mortar is not useful for society if it’s just sitting there,” she said. “You want these new houses to create communities, not just bricks of investment and first-time buyers are really locked out of this type of new housing . . . It’s very hard for a first-time buyer to compete when they are up against cash buyers.”

    Chloe Thorn, 26, has been saving for a deposit to buy a flat in Birmingham since she was 16. But when she began putting offers in she found that minimum deposits were either out of reach or flats were marked as investment-only. “It’s like being priced out of the city I’ve grown up in,” she added. “I remember when I first started looking in 2017 and seeing all these new buildings being built and thinking I may stand a chance of buying somewhere in the city once they are done. But once they went online to buy it was all investors-only on the majority.”

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    I've seen this before in Brum circa 2007.  It will all end in tears

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    I’m always curious what checks are done on all the foreign money washing up on these shores and buying property based on glitzy brochures ? I suspect the justification will be it comes via Bank transfers from abroad and not suitcases of cash but that still doesn’t explain how it got into those foreign bank accounts ie how it was ‘earned’ . 

    Anyway according to project fear all this ‘investment’ shouldn’t be even happening at all !
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    In five years time Laura Thorn will be thanking her lucky stars she wasnt able to buy one. Now if she were to buy this 4 miles out of the city it would be a far better bet :-

    https://www.rightmove.co.uk/property-for...39480.html

    For clarity, I will declare an interest as this is ours, but it is genuinely a great area, constant price growth, great demand from professional tenants. I wouldn't touch Birmingham city centre newbuilds with a bargepole.


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    Phil Stewardson.

    Stewardson Properties.

    Stewardson Developments Ltd.

    Burson Land Ltd. & Jennings & Gilchreaste Ltd.

    http://www.stewardson.co.uk

    Follow me on twitter - @philstewardson

    You do have to ask yourself the question how the money was earned to buy one hundred units at a time.

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    Developers dont get paid by asking questions, they get paid by taking money and selling flats. The bigger the moral issues, the lower the profits, that is the case I'm afraid.

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