One-on-one interview: David Fenton of Knight Frank
Stephen Maunder continues his series of interviews with leading estate agents by speaking to David Fenton, regional head of UK land at Knight Frank in the West Midlands about the market in Birmingham city centre.
Could you begin by telling me a bit about Knight Frank?
Knight Frank is a worldwide property partnership that deals in both the commercial and residential markets, in addition to the investment and land development sectors. The company has over 300 offices worldwide.
What is the property market like in Birmingham?
The Birmingham city centre residential market has really recovered but there is limited stock in terms of new builds - we are used to selling 1300-1400 units but we are currently down to our last 100 units of stock. We mainly focus on the new-build sector, with the majority of our properties being city centre apartments. The private rental sector in the city is really thriving, with a lot of investment interest coming from overseas, and China in particular.
As a city, Birmingham has changed dramatically in recent years, with lots of investment from businesses and plenty of buyers and investors coming in and purchasing property. There has been a real shift in market sentiment over the last six months, and we've been seeing activity from commercial investors and developers. Unfortunately, there has been little or no activity from the housebuilding sector, so supply remains a significant problem.
There has been plenty of talk about a bubble - are you concerned?
The UK property market has the ‘south-east effect' to take in to consideration, but I don't think here in the Midlands we've even got started - you have to have prices rising for a long time for a bubble to happen.
Are you concerned about the prospect of interest rates increasing later this year?
At the price range we trade in, interest rates will have some effect, but I don't expect the changes to be market-stopping or to profoundly affect business. The impact of interest rate increases will be geographic, and we are likely to see a ripple effect through traditional markets.
What do you expect to see happen in the local market in the near future?
There's very little stock in the region, with little by way of major schemes, so what we really need is some of the major developers to get involved and really stimulate the market.