Property Investment Birmingham

Property Investment Birmingham
Daniel Williams
Daniel Williams
Senior Property Writer
12 Min Read

Welcome to Birmingham, the UK’s second city. As one of Britain’s most vibrant and populated cities, this West Midlands hotspot has quickly become one of the UK’s best places to invest in property. 

So, if you’re looking for one of the best buy to let investment hotspots the UK has to offer, then keep reading to find out why you should invest in Birmingham property in 2022: 

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    Why Invest in Birmingham Property? 

    With the likes of Manchester, Liverpool, London, and Leeds all vying for the attention of property investors, you may be unsure if property investment in Birmingham is right for you. 

    Dig a little below the surface, though, and you’ll discover a city that boasts not only affordable prices and high rental income but also the demand needed to sustain a successful investment. 

    With that in mind, let’s take a look at the returns you can earn through Birmingham property investments in 2022: 

    Birmingham Investment Property Capital Growth 

    For property investors with one eye on retirement, long-term capital growth (the increase in a property’s value over time) may be one of the essential types of returns for you. 

    Luckily for those interested in property investment in Birmingham, the West Midlands city has delivered huge capital growth over the last 20 years. 

    According to the latest available data from the Land Registry, the average property price in Birmingham is currently £213,518.  

    While this is noteworthy due to its affordability (over £60k below the UK average), it’s also a whopping 7.66% higher than 12 months ago. 

    Although this falls short of the capital growth seen in places like Liverpool (10.69%) and Leeds (8.20%), it’s over 2% higher than property in London. 

    Factor in future house price growth predicted by JLL and you’ll find that Birmingham is one of the best places to invest in the UK property market over the coming years. 

    Birmingham Bullring Birmingham Bullring

    Buy to Let Birmingham Rental Yields 

    While Birmingham property investment ticks the box for long-term growth, it’s also suited to income-focused investors. 

    According to Zoopla’s house price data, the average rent in Birmingham is £1,353 PCM. 

    Therefore, property in Birmingham can deliver gross rental yields (not factoring in expenses) of 7.60%. 

    This is an incredibly high average and outperforms London (4.05%) and the UK average (4.65%) but falls short of Manchester (8.25%) and Leeds (8.34%). 

    These returns will get even higher for student investment property in Birmingham due to the lower property prices, but more on this later. 

    So, what’s the bottom line? 

    With a Birmingham property investment, investors can expect sizeable capital returns and rental yields. 

    Birmingham City Centre Birmingham City Centre

    Birmingham Population: The UKs Second Largest City 

    Birmingham is often called the UK’s second city due to its vast economy and large population. 

    Around 1.14 million people live in Birmingham, which is growing considerably. 

    Between 2002 and 2015, the ONS found that Birmingham’s population increased by a whopping 163%. 

    And with current predictions in place of the Birmingham city population to rise from 1.1 million to 1.23 million by 2038, it’s an exciting time to make a Birmingham investment. 

    After all, a rising population means an increase in buyers and tenants, which leads to rising house prices and rental income – a good sign for prospective Birmingham buy to let property investors. 

    It gets better: 

    Around 40% of Birmingham’s population is aged under 25.  

    This is a key age group of tenants in the private rented sector, with young professionals one of the most likely age groups to rent. 

    As such, property investment in Birmingham has several attributes needed for a successful investment in 2022. 

    Where Should You Invest in Birmingham 2022?

    So, where should you buy to let in Birmingham in 2022? 

    Not all areas offer the same investment potential, with different locations offering different rental values, house prices, tenant demand, and growth potential. 

    Based on our research, the following seven buy to let locations are offering some of the best Birmingham investment property and rental property in the entire Birmingham rental market: 

    Average House Price: £250,297 

    Average Rental Yield: 5.14% 

    The heart of any city, Birmingham city centre is likely the best place to invest in Birmingham in 2022.  

    A bulk of Birmingham’s massive regeneration is centred on the city centre, with HS2 Curzon Street and the Big City Plan set to create 80,000 jobs. 

    Average House Price: £231,700 

    Average Rental Yield: 5.62%  

    Located five minutes from the Bull Ring, Digbeth is one of Birmingham’s most popular residential areas.  

    Named one of the UK’s coolest places to live by The Sunday Times, Digbeth is set for huge growth thanks to the upcoming HS2 Curzon Street Station.  

    Average House Price: £247,282 

    Average Rental Yield: 5.21% 

    A sub-district in the city centre, the Jewellery Quarter has many investment opportunities thanks to a wide range of property types.  

    Birmingham property investors have a tonne of choice in this popular rental hotspot, from contemporary apartments, luxury conversions, to stunning townhouses.  

    Average House Price: £208,671 

    Average Rental Yield: 3.53% 

    Found to the north of the city, Erdington is one of the more affordable locations for housing.  

    Incredibly popular amongst students thanks to its ideal location near to popular campuses, a student accommodation investment can be a good choice here. 

    Average House Price: £334,547 

    Average Rental Yield: 4.59% 

    An affluent borough technically outside of Birmingham, Solihull is set for substantial growth thanks to an upcoming HS2 interchange found nearby. 

    Other flagship projects making headlines include Westgate, Kinghurst village centre, and the NEC arena makeover. 

    Average House Price: £319,455 

    Average Rental Yield: 4.59% 

    The perfect family hotspot in Birmingham thanks to its warm village feel, Edgbaston is home to several amenities, making it an ideal place to live. 

    Acting as the home of the Warwickshire County Cricket Club and Birmingham’s first Michelin-starred restaurants, families have several places to visit, including the Midlands Art Centre and Victorian Botanical Gardens. 

    Average House Price: £352,197 

    Average Rental Yield: 4.00% 

    Another affluent area in Birmingham for families, Harborne is one of the most desirable living spaces in all the West Midlands.  

    Around 63% of Harborne workers are employed at a managerial or executive level, making the area a lucrative investment opportunity for investors with cash to spare.  

    Birmingham City Centre

    Average House Price: £250,297 

    Average Rental Yield: 5.14% 

    The heart of any city, Birmingham city centre is likely the best place to invest in Birmingham in 2022.  

    A bulk of Birmingham’s massive regeneration is centred on the city centre, with HS2 Curzon Street and the Big City Plan set to create 80,000 jobs. 

    Digbeth

    Average House Price: £231,700 

    Average Rental Yield: 5.62%  

    Located five minutes from the Bull Ring, Digbeth is one of Birmingham’s most popular residential areas.  

    Named one of the UK’s coolest places to live by The Sunday Times, Digbeth is set for huge growth thanks to the upcoming HS2 Curzon Street Station.  

    Jewellery Quarter

    Average House Price: £247,282 

    Average Rental Yield: 5.21% 

    A sub-district in the city centre, the Jewellery Quarter has many investment opportunities thanks to a wide range of property types.  

    Birmingham property investors have a tonne of choice in this popular rental hotspot, from contemporary apartments, luxury conversions, to stunning townhouses.  

    Erdington

    Average House Price: £208,671 

    Average Rental Yield: 3.53% 

    Found to the north of the city, Erdington is one of the more affordable locations for housing.  

    Incredibly popular amongst students thanks to its ideal location near to popular campuses, a student accommodation investment can be a good choice here. 

    Solihull

    Average House Price: £334,547 

    Average Rental Yield: 4.59% 

    An affluent borough technically outside of Birmingham, Solihull is set for substantial growth thanks to an upcoming HS2 interchange found nearby. 

    Other flagship projects making headlines include Westgate, Kinghurst village centre, and the NEC arena makeover. 

    Edgbaston

    Average House Price: £319,455 

    Average Rental Yield: 4.59% 

    The perfect family hotspot in Birmingham thanks to its warm village feel, Edgbaston is home to several amenities, making it an ideal place to live. 

    Acting as the home of the Warwickshire County Cricket Club and Birmingham’s first Michelin-starred restaurants, families have several places to visit, including the Midlands Art Centre and Victorian Botanical Gardens. 

    Harborne

    Average House Price: £352,197 

    Average Rental Yield: 4.00% 

    Another affluent area in Birmingham for families, Harborne is one of the most desirable living spaces in all the West Midlands.  

    Around 63% of Harborne workers are employed at a managerial or executive level, making the area a lucrative investment opportunity for investors with cash to spare.  

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    Is Birmingham a Good Place to Invest in Property?

    For a city to be a good investment, it’s important to consider what’s driving the underlying stats. 

    While rental yields and capital growth are vital measurements, they don’t always tell the full story. 

    Therefore, it’s essential to look beyond the stats to determine whether these returns are sustainable. 

    Below you’ll find a breakdown of why you should invest in Birmingham with a look at demand vs supply, regeneration, transport links, and economic strength.  

    The massive growth in UK house prices seen over the last two years has stemmed from a huge demand vs supply imbalance. 

    In a January 2022 report from Rightmove, the property company found that competition among buyers is twice as high as January 2021, with the number of homes for sale per estate agency reaching its lowest ever level.  

    Demand is important for property investment as it not only increases the chance of finding a tenant for your home but will also sustain house price growth and rental growth. 

    Luckily for those considering a Birmingham buy to let investment, Birmingham has one of the biggest demand and supply imbalances in Europe. 

    According to Birmingham City Council, around 80,000 new homes will be needed by 2031. 

    JLL has echoed these claims, with Birmingham needing 4,000 new build homes each year for the next decade – the highest amount outside of London and over three times higher than Leeds. 

    Like many other UK cities, Birmingham has a range of ongoing urban regeneration schemes in place that are helping to grow the economy and increase the appeal of Birmingham property investment.   

    The major regeneration strategies are:  

    • Big City Plan – set to create 50,000 new jobs and £2.1 billion for the local economy.  
    • High Speed 2 (HS2) – will create 30,000 new jobs and reduce travel time from Birmingham to London to under an hour.  
    • Birmingham Smithfield – £1.5bn development of a 14-hectare site with 1,000 new homes and 3,000 new jobs.  
    • Midlands Metro Expansion – Improved transport links for professionals in and out of Birmingham.  
    • Paradise – £700m project adding 1.8m sq. ft. of grade A office space, retail and leisure space in Birmingham city centre.  
    • Arena Central – Near the Paradise development and will be home to HSBC’s main headquarters.   

    Investors should keep a strong eye on Paradise, Birmingham Big City Plan, and HS2, which could see investment into the area explode.  

    And with the addition of over 80k jobs into the city from the Big City Plan and HS2, we could be set to see an unprecedented rise in market activity in Birmingham in the coming years.  

    Infrastructure is vital for a cities success as it increases the quality of life and job opportunities for residents. 

    Excitingly, property investment in Birmingham boasts some of the best connectivity in Europe, with a tonne of transport links for Birmingham residents to choose. 

    Much of this is owed to its location, with Birmingham acting as the logistical heart of the UK thanks to being within four hours of most major cities and towns. 

    But Birmingham also boasts fast (and affordable) inner-city travel. 

    Alongside buses and trains, Birmingham also offers a city-wide tram system that links residents from the city centre all the way to Solihull and Wolverhampton.  

    The upcoming HS2 line, Birmingham Curzon Street Station, will also massively improve transport. Current estimations suggest the station will reduce travel time to London to only 45 minutes.  

    Birmingham HS2 will also reduce travel time to all these locations: 

    • Manchester – HS2 time 41 minutes, current time 87 minutes  
    • London – HS2 time 45 minutes, current time 82 minutes  
    • Sheffield – HS2 time 57 minutes, current time 59minutes  
    • Leeds – HS2 time 49 minutes, current time 118 minutes  
    • Newcastle – HS2 time 117 minutes, current time 166 minutes  
    • Edinburgh – HS2 time 194 minutes, current time 243 minutes  
    • Glasgow – HS2 time 200 minutes, current time 240 minutes  

    Amenities 

    There’s also plenty to see and do for residents in Birmingham.  

    First up is the Bullring Shopping Centre, which is busier than every other UK shopping location except London’s iconic Oxford Street.  

    Secondly, Arena Birmingham and the International Convention Centre attract thousands of visitors each year.  

    And aside from excellent restaurants and leisure spots, the iconic canal-side Brindley place and Gas Street Basin deliver some of the best leisure and dining spots in the entire region.   

    A significant contributor to Birmingham’s rising population and increased rental demand is the fantastic employment opportunities on offer.  

    World-renowned businesses such as HSBC, Deutsche Bank, and PWC call the city home.  

    Incredibly, Birmingham’s number of active businesses has increased by three times the national average over the past four years.  

    The city already has the largest business and financial hub outside of London. With more jobs on the way from regeneration like the Big City Plan, it’s easy to see why so many people are moving to the region.  

    Birmingham has continued to flex its economic development and job creation over the past year.  

    The Centre for Economics and Business Research reveals that Birmingham’s GVA increased by 24.7% in Q2 2021 – 1.7% higher than the national average. 

    It’s unsurprising, then, that Rightmove revealed that rental enquiries in Birmingham increased by 51% between 2020 and 2021, with the largest increase in rental demand over that period in the UK.  

    Naturally, a large student population is incredibly beneficial for investors looking into student property investment in Birmingham and buying student accommodation.  

    However, did you know a student population is also beneficial for residential buyers?   

    Today’s students are the professionals of tomorrow, and cities that attract graduates to stay and work are often the best for property investment.  

    Luckily, Birmingham is one of those cities.  

    With a student population of around 100,000, Birmingham has one of the highest graduate retention rates in the UK, with Knight Frank reporting a 46% retention for 2020.   

    According to the Centre for Cities, the city is also the third best performing UK city for attracting graduates with no prior links to Birmingham.  

    You can learn more about student property investment in our 2022 guide or in our blog on the best places to invest in student accommodation. 

    Demand vs Supply

    The massive growth in UK house prices seen over the last two years has stemmed from a huge demand vs supply imbalance. 

    In a January 2022 report from Rightmove, the property company found that competition among buyers is twice as high as January 2021, with the number of homes for sale per estate agency reaching its lowest ever level.  

    Demand is important for property investment as it not only increases the chance of finding a tenant for your home but will also sustain house price growth and rental growth. 

    Luckily for those considering a Birmingham buy to let investment, Birmingham has one of the biggest demand and supply imbalances in Europe. 

    According to Birmingham City Council, around 80,000 new homes will be needed by 2031. 

    JLL has echoed these claims, with Birmingham needing 4,000 new build homes each year for the next decade – the highest amount outside of London and over three times higher than Leeds. 

    Regeneration and Development

    Like many other UK cities, Birmingham has a range of ongoing urban regeneration schemes in place that are helping to grow the economy and increase the appeal of Birmingham property investment.   

    The major regeneration strategies are:  

    • Big City Plan – set to create 50,000 new jobs and £2.1 billion for the local economy.  
    • High Speed 2 (HS2) – will create 30,000 new jobs and reduce travel time from Birmingham to London to under an hour.  
    • Birmingham Smithfield – £1.5bn development of a 14-hectare site with 1,000 new homes and 3,000 new jobs.  
    • Midlands Metro Expansion – Improved transport links for professionals in and out of Birmingham.  
    • Paradise – £700m project adding 1.8m sq. ft. of grade A office space, retail and leisure space in Birmingham city centre.  
    • Arena Central – Near the Paradise development and will be home to HSBC’s main headquarters.   

    Investors should keep a strong eye on Paradise, Birmingham Big City Plan, and HS2, which could see investment into the area explode.  

    And with the addition of over 80k jobs into the city from the Big City Plan and HS2, we could be set to see an unprecedented rise in market activity in Birmingham in the coming years.  

    Infrastructure

    Infrastructure is vital for a cities success as it increases the quality of life and job opportunities for residents. 

    Excitingly, property investment in Birmingham boasts some of the best connectivity in Europe, with a tonne of transport links for Birmingham residents to choose. 

    Much of this is owed to its location, with Birmingham acting as the logistical heart of the UK thanks to being within four hours of most major cities and towns. 

    But Birmingham also boasts fast (and affordable) inner-city travel. 

    Alongside buses and trains, Birmingham also offers a city-wide tram system that links residents from the city centre all the way to Solihull and Wolverhampton.  

    The upcoming HS2 line, Birmingham Curzon Street Station, will also massively improve transport. Current estimations suggest the station will reduce travel time to London to only 45 minutes.  

    Birmingham HS2 will also reduce travel time to all these locations: 

    • Manchester – HS2 time 41 minutes, current time 87 minutes  
    • London – HS2 time 45 minutes, current time 82 minutes  
    • Sheffield – HS2 time 57 minutes, current time 59minutes  
    • Leeds – HS2 time 49 minutes, current time 118 minutes  
    • Newcastle – HS2 time 117 minutes, current time 166 minutes  
    • Edinburgh – HS2 time 194 minutes, current time 243 minutes  
    • Glasgow – HS2 time 200 minutes, current time 240 minutes  

    Amenities 

    There’s also plenty to see and do for residents in Birmingham.  

    First up is the Bullring Shopping Centre, which is busier than every other UK shopping location except London’s iconic Oxford Street.  

    Secondly, Arena Birmingham and the International Convention Centre attract thousands of visitors each year.  

    And aside from excellent restaurants and leisure spots, the iconic canal-side Brindley place and Gas Street Basin deliver some of the best leisure and dining spots in the entire region.   

    Economic Strength

    A significant contributor to Birmingham’s rising population and increased rental demand is the fantastic employment opportunities on offer.  

    World-renowned businesses such as HSBC, Deutsche Bank, and PWC call the city home.  

    Incredibly, Birmingham’s number of active businesses has increased by three times the national average over the past four years.  

    The city already has the largest business and financial hub outside of London. With more jobs on the way from regeneration like the Big City Plan, it’s easy to see why so many people are moving to the region.  

    Birmingham has continued to flex its economic development and job creation over the past year.  

    The Centre for Economics and Business Research reveals that Birmingham’s GVA increased by 24.7% in Q2 2021 – 1.7% higher than the national average. 

    It’s unsurprising, then, that Rightmove revealed that rental enquiries in Birmingham increased by 51% between 2020 and 2021, with the largest increase in rental demand over that period in the UK.  

    Massive Student Hotspot

    Naturally, a large student population is incredibly beneficial for investors looking into student property investment in Birmingham and buying student accommodation.  

    However, did you know a student population is also beneficial for residential buyers?   

    Today’s students are the professionals of tomorrow, and cities that attract graduates to stay and work are often the best for property investment.  

    Luckily, Birmingham is one of those cities.  

    With a student population of around 100,000, Birmingham has one of the highest graduate retention rates in the UK, with Knight Frank reporting a 46% retention for 2020.   

    According to the Centre for Cities, the city is also the third best performing UK city for attracting graduates with no prior links to Birmingham.  

    You can learn more about student property investment in our 2022 guide or in our blog on the best places to invest in student accommodation. 

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    Birmingham vs London Property Investment Birmingham vs London Property Investment

    Birmingham vs London

    As the UK’s second city, you would be forgiven to think that Birmingham falls short of investment property in London. 

    But while London remains one of the economic powerhouses of Europe, the property market of the British capital is underperforming when compared to Birmingham. 

    Firstly, London house prices are far higher than Birmingham property prices, with an average value of £521,146. 

    While this isn’t necessarily a bad thing, as it shows the value of a London asset, it does price many investors from securing a London property. 

    Due to this extreme price tag, London rental yields also fall below those in Birmingham, with a current average return of just 4.05% 

    Even long-term growth can’t compete with Birmingham, with the UK’s second city boasting a predicted average yearly growth rate of 4.9% by 2026, compared to 4.7% in the Greater London region. 

    FAQs

    A good Birmingham rental yield is usually above 5%. Any lower than this, you may struggle to cover expenses like mortgage or maintenance costs.  

    Thanks to affordable prices and high returns, a flat in Birmingham is a top choice in 2022. According to the UK House Price Index, a flat in Birmingham is available from just £148,047 on average. This means you can expect to earn strong rental yields of 8.24%. 

    Yes, property is currently a good investment in the UK in 2022.  

    House prices have increased at their fastest rate since 2004, with rental income reaching an all-time average of £1,064 per calendar month. Factoring in a huge supply shortage of houses, this growth will likely continue for the foreseeable future.  

    While property investment Birmingham is a top choice for many investors, it falls short of the investments on offer in the North West. 

    Why? 

    Well, places like Liverpool and Manchester have continued to offer higher returns and capital growth than Birmingham over the last few years. 

    According to our research, which you can check out in our guide to the best places to invest in property, Liverpool had the second-highest capital growth in the UK, while Manchester had the fourth-highest rental yields. 

    In comparison, Birmingham finished 10th for capital growth (still very respectable) and 8th for rental yields.  

    Yes, Birmingham has an excellent rental market thanks to the high demand seen in the city. With a strong population of young professionals and a reported 100,000 students living in the city, Birmingham has the demand needed to sustain a long-term property investment. 

    Just be sure to equip your property with desirable attributes, which includes fast WIFI and access to outdoor space. 

    What is a Good Rental Yield in Birmingham?

    A good Birmingham rental yield is usually above 5%. Any lower than this, you may struggle to cover expenses like mortgage or maintenance costs.  

    Should I Buy a Flat in Birmingham?

    Thanks to affordable prices and high returns, a flat in Birmingham is a top choice in 2022. According to the UK House Price Index, a flat in Birmingham is available from just £148,047 on average. This means you can expect to earn strong rental yields of 8.24%. 

    Is Property a Good Investment UK 2022?

    Yes, property is currently a good investment in the UK in 2022.  

    House prices have increased at their fastest rate since 2004, with rental income reaching an all-time average of £1,064 per calendar month. Factoring in a huge supply shortage of houses, this growth will likely continue for the foreseeable future.  

    Should You Choose Birmingham or the North West?

    While property investment Birmingham is a top choice for many investors, it falls short of the investments on offer in the North West. 

    Why? 

    Well, places like Liverpool and Manchester have continued to offer higher returns and capital growth than Birmingham over the last few years. 

    According to our research, which you can check out in our guide to the best places to invest in property, Liverpool had the second-highest capital growth in the UK, while Manchester had the fourth-highest rental yields. 

    In comparison, Birmingham finished 10th for capital growth (still very respectable) and 8th for rental yields.  

    Does Birmingham Have a Good Rental Market?

    Yes, Birmingham has an excellent rental market thanks to the high demand seen in the city. With a strong population of young professionals and a reported 100,000 students living in the city, Birmingham has the demand needed to sustain a long-term property investment. 

    Just be sure to equip your property with desirable attributes, which includes fast WIFI and access to outdoor space. 

    Start a Property Investment Birmingham UK Journey With RWinvest 

    Ready to invest in Birmingham property? 

    RWinvest currently has some of the best investment property for sale in Birmingham in 2022, with several world-class buy to let Birmingham city centre apartments. 

    If you want to secure a Birmingham investment property, now is the perfect time to do it with RWinvest. 

    We are an award-winning property investment company with 18 years of experience in residential and student property.  

    You can start investing with us today from only £34k and get NET rental yields up to 8%.  

    Contact us now and explore all our latest investment property for sale in Birmingham and beyond.   

    Alternatively, check out our range of exciting properties in Liverpool and Manchester, with the brand-new luxury riverside Manchester skyscrapers Embankment Exchange available from £38,750k today. 

    Daniel Williams
    Daniel Williams
    Senior Property Writer

    Daniel Williams is a senior property writer at RWinvest. Regularly publishing in-depth articles on topics such as the best investment areas in the UK and guides on how to invest, Daniel has a keen eye for statistics and analysing property market changes.