According to a new report by real estate advisor, Savills, Birmingham New Street station has seen a 33 per cent increase in passenger use since 2015, which is driving demand for high quality new homes and residential development in the area. Consequently, property prices within 2km of the station have increased by 44 per cent over the past five years, a 14 per cent premium on other parts of the city.
The report, titled ‘Market in Minutes: New homes and infrastructure’ outlines that this is also rippling out into markets in the surrounding areas with Rugby, Coventry and Long Buckby all seeing an uptick in commuters of 18 per cent, while house prices have increased by 35 per cent, 46 per cent and 67 per cent respectively.
Joe Shorney, head of residential development sales at Savills in the Midlands, based in Birmingham, comments: “Transport and enhanced connectivity has a key role to play in the delivery of new homes and can fuel residential demand and consequently aid house price growth. Ahead of HS2 at Curzon Street station, there has been significant investment in the regeneration of Birmingham city centre. This has also triggered commercial investment from companies choosing to relocate to the Midlands such as Deutsche Bank and HSBC, and has helped to drive residential demand and subsequent house price growth.
“The fundamentals for the Midlands remain strong with the city continuing to reposition itself nationally as a major regional centre with a dramatically enhanced profile. The improved connectivity derived from Midlands Metro and HS2 is driving demand, bringing more people to Birmingham to live, work and play.”
It is anticipated that the Westside extension of the tram network, due to open in 2021, will also have an impact on residential house price growth.
Joe adds: “We would expect to see a positive impact on residential prices along the route together with a knock on effect for the wider property market, including an uplift in demand for retail and office space. The route will travel past HSBC’s new offices at Arena Central and the PWC offices in Paradise Birmingham, connecting them to the desirable residential suburb of Edgbaston. Previously the only alternative ways of travelling into the city centre were by bus or car, so this added level of accessibility and connectivity will make opportunities along this route attractive for developers of new homes whilst also having a positive impact on existing ones.”
Elsewhere, stations which saw the largest increase in passenger number use were those within a 19 to 39 minute journey time from a central London rail terminal. These are also the markets within the commuter belt which have seen the largest increase in second-hand sale prices over the past five years – a 24% increase against the average for England and Wales. (44% vs 20%).
Gaby Day, Savills research analyst, says: “We expect the ripple effect to move beyond London’s commuter zone to markets in the Midlands and the North. These markets have seen house prices rise more in line with wages, and therefore remain more affordable. They will have the most capacity for growth over the next few years.
“Infrastructure investment and a strong local economy are likely to remain catalysts for residential demand and house price growth. The £1.7 billion Transforming Cities Fund will provide funding for improved connectivity in areas such as the West Midlands, Greater Manchester, Cambridgeshire and Liverpool City Region.”
For further information, go to www.savills.co.uk/birmingham.