North Worcestershire and the Black Country seem to be going from strength to strength. With political uncertainty, Brexit and the potential small rise in interest rates announced by the Bank of England’s Monetary Policy Unit, it is unsure why this is the case. Is it that the economy of our region and the powerhouse of the Midlands Engine Birmingham is strengthening or a better feeling of the economy going forward. Unprecedented demand for land and good commercial property with an upturn in retail demand seems to indicate a shift in our fortunes
Over the last month enquiries have continued to grow, resulting in the sale and lettings of a number of properties throughout the Wyre Forest and Black Country areas. We have recently marketed 2 plots of potential development land and have been inundated with enquires from all over the region. 25 enquires were received in a couple of hours from the properties going live and to date we have received 10 offers across both sites.
As was reported previously, confidence seems to be returning to the commercial property and land markets and there is now clear evidence that there are small and medium sized businesses have decided that they are now of a size and economic strength where they can no longer trade from home, but need premises in which to operate. This has resulted in the letting of a number of small shops, offices and workshops.
The sales of industrial property have also shown an increase and with new instructions imminent and the agreed sales of several other industrial properties, then the outlook is looking promising as banks and other lending institutions seem to be more favourably disposed towards lending to companies who have managed to increase their market share. These companies now have healthy balance sheets, which enables them to grow their businesses further with bank support.
Investment property is still very much a favourable option for many investors. Shops with flats over seem popular investments for many as well as well let industrial and good quality office and mixed use buildings. Private individuals are also looking to purchase flats and houses To Let as they see this as a good long term investment as opposed to other types of investment showing lower rates of return, despite tax changes and a harder mortgage market. This may be as a result of the evolving pension market and the weight of money, with SIPPs and other forms of pension enabling both companies and individuals to purchase. We have a record number of valuations currently where these types of purchases and the moving pf property between funds is a very active sector and this is across the spectrum of all property uses.
Whilst capital and rental values for commercial property and land in this area shows little sign of increase, then tenants will be attracted to the properties which are well situated and have been well maintained. There are however small signs of some movement, especially land and property refurbishments which are consistently beating valuation or indeed reserves through our new Auction department.
Larger retail units are still the most difficult sector and we are still seeing charity shops taking such properties, if only to save landlords the cost of business rates and other overheads whilst the shops remain void. Many of these shops have remained empty for a long time and despite incentives being offered by local authorities and the increase on the small business rates relief to get these shops occupied, levels of enquiries for larger central retail units is still very low.
One to watch for commercial landlords is Minimum Energy Efficiency Standards It has been a legal requirement for some years to have an EPC (Energy Performance Certificate) on commercial property to be let or sold. The law is changing and owners and occupiers should be aware of the consequences, this will be known as Minimum Energy Efficiency Standards (MEES).
MEES represent one of the most significant environmental policies to impact the commercial property sector in several years making it vital that agents, landlords and tenants are sufficiently informed and act before the deadline. It will unlawful from April 2018 to let buildings in England and Wales which do not achieve a minimum EPC rating of ‘E’ and while ‘E’ rated properties can still be let, they could be at risk, with the minimum rating set to rise in 2023.
The residential market goes from strength to strength and properties are going very quickly with an improved turnaround time.
Walton & Hipkiss, established in 1929 is proud of its long family history, now with offices in Kidderminster, Stourbridge and Hagley successfully selling and letting homes, commercial property and land in and around North Worcestershire, Wyre Forest and The Black Country. We are experiencing very busy activity across all markets and with our new Auction Department bringing new and innovative cost saving ways to help clients sell their properties at reduced or even zero fees.