West Midlands land market is 'steady' despite pressures, says Savills

According to a new report by Savills, which assesses the development land market, it was revealed that in some markets – including the Midlands - market pressures are resulting in reasonable competition and maintaining land values.

A net balance of 37 per cent of Savills development agents also reported more positive market sentiment up from 23 per cent in March 2023 within the firm’s sentiment survey.

This sentiment is also being reflected throughout the region’s new homes market, according to Joe Shorney, head of residential development sales in the Midlands at Savills.

“Whilst the current market, as it has been since the turn of the year, remains a needs-based one, the motivation and commitment to move and buy within the new homes market remains strong," he said."And with the three of the UK’s largest lenders recently cutting mortgage rates, buyers and sellers are rightly viewing this in a positive light, as it could signal the beginning of a more competitive mortgage market.

“Although higher interest rates and wider market uncertainty continue to be prevalent challenges this year, agreed sales at a local level in the last 6-8 weeks have underlined how resilient the market is. Furthermore, there appears to be a positive attitude towards budgets and financing among relocators, upsizing families, downsizers, investors and even affluent first time buyers. Many are refusing to put their lives on hold and viewing any purchase as a longer-term investment than they perhaps were previously, especially where available properties are priced well. This includes first-time buyers, despite this buyer type being the hardest hit in the current market.

“Whilst there has been relatively fewer active buyers, there is a sustained level of interest in developments across the Midlands and we are seeing a much healthier viewings-to-sale ratio presently, which is better than the industry average. In a market such as this, pricing is absolutely crucial.”

A further report by Savills on the Build to Rent (BtR) market in the UK, April – June 2023 saw the highest Q2 investment transaction volume ever recorded, at £1.26bn.

According to the report, multifamily units have made up 58per cent of BtR volumes this year, with major transactions including the forward funding of Lower Essex Square, Birmingham, between Apsley House Capital/Galliard Homes and OutPost Management/Blackrock, playing its part.

Mr Shorney added: “Birmingham and the Midlands region have an enormous amount to offer and provide a fantastic lifestyle, with excellent transport links too.

"With such huge growth potential, it is little surprise that the BtR market is proving so attractive to investors, but from a new homes perspective there remains a strong mix of buyer types.

"Whilst first time buyers are, understandably, the hardest hit among these, the increased level of optimism is a sign that the market is at least moving in the right direction."