Birmingham is the UK’s second-largest city after London, both in terms of population and economic power. Over the past 30 years, it has undergone extensive regeneration as part of its Big City Plan – transforming much of the area from a ‘concrete jungle’ to a modern, highly-livable, and exciting space for the people and businesses that live there. In this article, we will discuss where we consider to be the best buy-to-let areas in Birmingham.
For many new and experienced property investors, Birmingham has become an excellent choice of location for a buy-to-let – whether it’s to diversify a growing portfolio or begin the journey. It has all characteristics that buy-to-let investors should be looking for:
- It’s popular with young professionals
- It has a strong student community (80,000+ students across three major universities)
- It has a rich industrial heritage with long-term regeneration plans
- It has rapidly growing service industries (such as finance)
- It’s a major transport hub
- It attracts millions of tourists each year (4th most popular city in the UK for tourism)
- Both property and rental values are expected to rise
Investor appetite for Birmingham is growing too. The excessively high costs of investing in London, plus the poor forecasted returns for the city over the coming years (relative to the exceptional growth of the past 20 years), means alternative options in the UK’s other core cities are attracting more and more attention. For example, the number of people who use Google to search for “property investment Birmingham” has increased by 129% over the past four years – the strongest growth of any major city in the UK (Manchester is next best with 122%).
So if we know Birmingham is a good investment location and we know investors are increasingly looking for property there, then the next question is: where exactly are the best buy-to-let areas within Birmingham?
One way to answer this question is to consider rental yields. Yields are an excellent measure of performance, given they show the return on investment from rental income, relative to a property’s value. A rental yield of more than 4% is a must to ensure a buy-to-let property runs profitability.
So, using industry data, we’ve gathered the average rental yields for every postcode district in Birmingham to find the 10 best areas, with the results below.
Top 10 Areas for Buy-to-Let In Birmingham By Rental Yield
The best buy-to-let areas in Birmingham by rental yield are:
|Postcode||Average Property Value||Average Rent Price (pcm)||Average Rental Yield|
1. Edgbaston, Selly Oak & Balsall Health
If you head southwards from Birmingham city centre, chances are you’ll pass through several of the postcode districts in the top 10.
First, and foremost, is B29, which offers the best rental yield in Birmingham with an average of 7.1%.
B29 covers Selly Oak, Selly Park, Bournbrook and extends upto Weoley Castle.
In particular, Selly Oak, Selly Park and Bournbrook are extremely popular with students due to their close proximity to the University of Birmingham campus (including its medical school at the Queen Elizabeth Hospital).
Student accommodation always tends to attract the strongest rental yields, which helps to explain why B29 came out on top.
It’s joined in the top 10 by neighbouring B15 and B12, whilst even further out is B32.
B15 covers Edgbaston, an area internationally famous for its cricket stadium, but better known locally as an affluent suburb adored by families. Furthermore, the University of Birmingham campus mentioned above is located within B15, as is the Birmingham City University southern campus – meaning there are students living here too.
Meanwhile, B12 sits to the east of both Edgbaston’s B15 and Selly Oak’s B29 and instead stretches out southwards from the central and trendy Digbeth (more on Digbeth later) down to Balsall Health and Balti Triangle – a reference not only to the local restauranteurs who invented the ‘Balti’ in the 1970s but also to the history of great Indian and Asian restaurants in the area.
Balsall Heath is just north of Moseley, a suburb with a reputation for its creative, bohemian feel. House prices in Moseley’s B13 postcode are high (£276,000 on average), so those who are priced out of the area may want to live nearby in the more affordable B12 instead.
Further southwest is B32’s Quinton. Although it has an older population, it has great transport access with the M5 motorway close by, and a direct link into the city centre via Hagley Road West. As professionals and young families start seeking more space and better value, this area is a consideration and the data shows solid returns for investors with B32 coming 10th on our list.
2. The Jewellery Quarter
In the second place, the postcode district of B18 sits just outside the northwest edge of Birmingham’s ring road (also known as The Middleway).
The postcode starts in Winson Green and Soho, before spilling over into the trendy, rejuvenated Jewellery Quarter.
The Jewellery Quarter is a stunning region with a rich history. It’s highly popular with young professionals who enjoy the walkable commute to the city centre, the thriving food and drink scene, and the high standard of townhouses, modern apartment blocks, and period conversions.
The Jewellery Quarter is well represented in the top 10. Not only is there B18, but there’s B1 and B3 too, which both cover parts of the Quarter – showcasing the high demand for city-centre living from Birmingham’s young professionals.
Although not quite in the Jewellery Quarter, B16 runs along the western edge of B18, putting it within easy reach of both the city centre and Edgbaston. For this reason, it attracts a mix of students and young professionals looking for something just outside of the hustle and bustle of the centre.
B5 is the third-best postcode on our list, and that belongs to the famed Digbeth, a neighbourhood picked out by The Sunday Times as the ‘coolest in Britain’.
Located within a few minutes’ walk of the city centre, Digbeth has a plethora of independent and artisanal restaurants, bars, pop-up stalls, creative spaces, digital businesses, and more. Old warehouses and workshops have been lovingly restored to create a new and vibrant community, plus there are plans for an HS2 station nearby.
As a result, and perhaps unsurprisingly, rental property in the area is always in high demand, resulting in a fast-growth property market and excellent buy-to-let yields.
4. The Gun Quarter & Aston Triangle
On the northeast side of the city centre lies B4, which comes 9th on our list. This postcode primarily contains The Gun Quarter and Aston Triangle.
The Gun Quarter, much like the neighbouring Jewellery Quarter, is named after the area’s manufacturing past. It is gradually being transformed into a stylish residential area by repurposing old, industrial warehouses as luxury apartments.
Nearby, campuses of both Aston University and Birmingham City University attract thousands of students each year. Similar to B29, this helps to boost average rental yields in B4 with both purpose-built accommodation and student HMOs performing particularly well.
Birmingham is an excellent choice for property investment, with many areas showing strong rental yields and attractive prices – the average cost of a property in the city is significantly lower than anywhere in the south, for example.
This research shows there are several standout suburbs, with particularly strong rental yields found in B29’s Selly Oak as a result of the student populous.
However, whilst this serves as a good starting point for any foray into the Birmingham property market, investors should continue to research each area thoroughly. It’s also wise to consider the long-term capital appreciation of different properties – whilst student accommodation in B29 may deliver the best yields, faster growth in property values is typically achieved on traditional, residential apartments favoured by young professionals, making the likes of Digbeth or Edgbaston brilliant choices too.
If you’d like to discuss the best buy-to-let areas in Birmingham, we can help. We specialise in buy-to-let property, and we’re particularly focused on the markets outside of London – with Birmingham, Liverpool and Manchester being major hotspots.
Get in touch to learn more and speak to our team today.
About this data
The data in this article is an accurate representation of the Birmingham property market as of April 2022. We’ll update this report next year, in 2023, with fresh data.