Property Investment In Birmingham
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Thanks to its booming economy and property market, Birmingham is one of the most exciting parts of the UK to invest.
Approximately 40% of Birmingham is made up of under 25’s and it is also one of the most ethnically diverse cities in the country. It is predicted that Birmingham’s population will reach 1.3 million by 2039.
Birmingham is also preparing to host the 2022 Commonwealth Games, which will provide a further boost to the local economy. The Commonwealth Games Village, which will serve as accommodation for the athletes, will be converted to residential housing after the games are finished.
Why invest in Birmingham?
Birmingham is seen as a top buy-to-let area due to a huge, growing rental demand. It has a thriving business scene driving the demand, with world renowned companies such as HSBC and Deutsche Bank headquartered in the city.
The great thing about property investment in Birmingham is prices are still at an attractive level with room to grow, plus yields are strong. For example, the B9 postcode has an average yield of 5.3%, but an average property value of just £149,031.
Finally, regeneration is ripe and there is a 20 year plan to transform the city centre. Birmingham’s ‘Big City Plan’ is dubbed by the city’s council as the ‘most ambitious, far-reaching development project ever undertaken in the UK’. This will provide 50,000 new jobs, 5,000 new homes and improved infrastructure to meet the needs of new residents.
Types of Investments
A low supply of rental properties mixed with increasing demand makes Birmingham a great place for property investors. In February 2020, a survey by Simply Business placed Birmingham as joint second with Liverpool as the best place in the UK to invest in buy-to-let property. Ongoing investment and regeneration means this city’s reputation as a property investing hotspot is increasing. Tenant demographic is favourable too, with under 25’s making up 40% of the city's population.
With a student population of around 80,000 there is a substantial requirement for high quality, purpose built student accommodation. Birmingham has five popular universities – the University of Birmingham, University College Birmingham, Birmingham City, Neman University College and Aston. There is increasing attraction from UK and overseas students as it is a multi-cultural and cosmopolitan city. Knight Frank reports that Birmingham is one of the top UK cities for overseas students.
There are different options in Birmingham to suit a variety of investors so we have picked out some of the most popular areas.
Naturally, the city centre is becoming more popular with professionals who want both workplaces and city centre amenities on their door stop. You can find conversions and period properties (the Jewellery Quarter is known for these) and also new build blocks such as the Mailbox area. With the population in the city centre at circa 25,800 and growing, along with an expected yield of 5% (Totally Money), it is still a hot spot for property investors purchasing in Birmingham.
This area of Birmingham has been tipped as an up and coming spot for buy-to-let investment in the immediate future due to growth potential, current and future demand, affordability and price growth. Prices are still at a relatively low entry point and the area offers potential great returns for those that get in and invest now. It is subject to more than £2billion of planned development projects over the coming years and is also within walking distance of HS2’s Curzon Street Train Station, plus the existing Moor Street and New Street stations. This really is one to look out for.
This area is located north of the city centre and it is one of Birmingham’s best areas when it comes to affordable housing. Yields stand at around 5-6%, whilst the current average price paid for a property is £161,360. This affordable suburb makes it a good place for investors to consider, especially if you are considering student accommodation. It has experienced 23.09% price growth over the last 5 years and room for more growth with regeneration in the pipeline such as a remodelling of Wilton Indoor Market and the re-development of Central Square Shopping Centre.
Another area pipped with great potential, the Athlete’s Village for the 2022 Commonwealth Games will be built here and post-games it will be transformed to provide 1,400 new homes. Alongside this will be improvements to public transport, a new railway station, new shops and more which is sure to have a positive impact on the property market. PropertyData reports that the area has an average yield of 4.6% and average property price of £181,665.
Future Growth in Birmingham
Frequently Asked Questions
Below you can find a range of common questions from previous investors. If you require specific details and advice please do not hesitate to contact us today on +44(0)203 627 3987 or via [email protected]
If you take a look at the current entry level prices, yields and regeneration taking place then it starts to build a great case for capital growth. That coupled with demand vastly outweighing supply explains why JLL have forecast a potential 15% increase in property prices 2019-2023.
According to Zoopla (June 2020), the average price paid for a property in the whole of Birmingham is £205,055. However, if you were looking at just flats then it is £138,648.
The city has seen a 23.08% house price increase in the last 5 years and Hometrack reports a 2.5% year on year growth from April 2019-2020.
Birmingham has a good city centre yield of between 4-5% (propertydata.co.uk) and the postcode B44 currently has the highest average yield of 5.4%. Birmingham as a whole is forecast to see rental prices increase by 16.5% through 2019-2023
Yes. Phase one of the HS2 is set to see Birmingham’s travel time to London cut to just 40 minutes and within an hour’s commute to Manchester, Sheffield, Leeds, York, Preston and Wigan.