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Birmingham Property Investment

While London was once the main focus for UK property investment, spiralling property prices and disappointing returns have led many investors to look away from the capital and towards property development in other cities. The UK’s second-largest city next to London, Birmingham has become more prevalent as a buy to let area, and Birmingham property investment is now a very popular option.

you’re looking to make a UK property investment, be sure to take some time to read this guide to the types of property investment Birmingham has to offer, and the best areas to buy property in Birmingham.

Birmingham Buy to Let
Property Investment Birmingham

Why invest in Birmingham?

So why is property in Birmingham considered such a good venture? There are multiple reasons why so many investors are choosing to buy property in Birmingham. Affordable properties, strong yields, consistent demand and high predicted growth are the key benefits that encourage people to get involved with Birmingham property investment. Here’s a detailed break down on each of the benefits of investing in Birmingham.

Buy To Let Birmingham

Invest in Birmingham for demand from young professionals

Demand is a key indicator of a solid investment, which is why Birmingham buy to let is so promising. Birmingham boasts one of the largest populations in the UK, home to approximately 1,073,045 people. The city has experienced significant growth over the years, with the most notable increase between 1911 and 1921. During this period, the population almost doubled in size, growing from 525,833 to 919,333.

Under 25s make up 40% of Birmingham and one-third of the city’s inhabitants are from an ethnic minority, creating one of the most ethnically diverse cities across the whole of the UK. By 2039, it’s predicted that the population of people living in Birmingham will reach 1.3 million.

One area in which Birmingham thrives in is its business scene. World-renowned businesses such as HSBC and Deutsche Bank are choosing to relocate their headquarter offices to Birmingham. HSBC’s new Birmingham headquarters development will create 1,000 jobs alongside Deutsche Bank, which will maximise their employment figures from 50 to 2,000.

This stance of Birmingham as a business city plays a part in the city’s growing population and significance as a buy-to-let hotspot. Young professionals are one of the most desirable tenants for buy to let properties, as they’ll often be more willing to pay larger amounts for their accommodation. In cities with a lot of business opportunities, the demand from this type of tenant becomes higher. That’s why looking for residential property for sale in Birmingham city centre is a good venture to consider due to the high levels of demand your property will experience.

Invest in Birmingham for high levels of student demand

Along with boasting a lot of demand from young professionals, Birmingham also has a large population of students seeking accommodation. With a student population of around 80,000, Birmingham was hailed the UK’s second-largest student city back in 2015.

The city boasts five popular universities – Aston, Newman University College, the University of Birmingham, University College Birmingham, and Birmingham City, while there are also twenty universities within an hour of Greater Birmingham. The city’s status as a top student city is another reason why purchasing a student property to let in Birmingham is the perfect way to invest in a lucrative venture.

Invest in Birmingham for low property prices and high yields

The Birmingham property market is known for being more affordable than some other cities in the UK. The average house price in Birmingham is £178,221, which is highly affordable when compared to cities in the south such as Brighton with an average of £361,075, and London which has a £484,173 average. Those who purchase buy to let Birmingham property can get more for their money with their investments than they would when buying properties elsewhere.

While properties are priced low in Birmingham, rental costs have been increasing as of late. There’s recently been an increase of 4.61 per cent for rental growth, leading to an average rent in Birmingham of around £877 per calendar month. This is the reason behind the average rental yields of 4.61 per cent in the city. Although this is a little lower than some other cities such as Manchester which boasts averages of 5.55 per cent, it’s still higher than London’s 3.05 per cent average. Some of the best areas of Birmingham when it comes to high rental returns are often those popular with student tenants, and can bring in yields as high as 11.66% in spots like the B4 postcode.

Invest in Birmingham for Capital Growth

Birmingham’s economy is worth £23.2 billion, having grown at a rate of 16.3 per cent since 2009. This makes Birmingham’s economy one of the fastest-growing in the UK. Like many other UK cities popular with investments, Birmingham has a range of ongoing regeneration schemes in place that are helping to grow the economy and increase the appeal of Birmingham property investment.

Some of the most notable regeneration projects in recent years were the Bull Ring development and the creation of New Street Station. The Bull Ring has long been one of Birmingham’s most famous features, undergoing previous regeneration back in the 1960s when it was turned into a shopping centre. In 2003, a project was introduced to transform the existing shopping centre, and today, it’s one of the UK’s busiest shopping centres, with a footfall of around 36.9 million per year. New Street Station is a major development that introduced a new railway station to the city, now standing as the sixth busiest railway station in Great Britain.

Future plans in place for the city include the £1 billion infrastructural development, HS2. This will transform Curzon St Station and improve connectivity for those travelling between London and Birmingham, enabling a commute time of just 49 minutes. Along with improving quality of life for Birmingham and London residents that need to commute between the two cities, HS2 will also create around 30,000 jobs and help to enrich local communities.

Regeneration is so important for a city when it comes to investments, as it suggests further market growth is on the horizon. Cities with extensive re-development help local properties to grow in value, in line with the growing appeal of the area. The property investment Birmingham offers is likely to experience capital growth due to rising house costs. Birmingham house prices have reportedly been rising at three times the national average, with an increase of 5.6 per cent between October 2017 to October 2018. Predictions from Savills have suggested that the West Midlands will see new growth of 14.8 per cent over the next five years, hinting at a bright future for property investment in Birmingham.

Property Investment Birmingham

Investment property for sale Birmingham – where to look

When finding a property to let in Birmingham, it’s important to know about the best areas in Birmingham for demand, rental yields, and capital growth potential. Here are five top buy to let Birmingham hotspots for you to consider.

Birmingham city centre

Population: 25,800 (Centre for Cities estimate)

Average House Price: £258,181

At the heart of the city is Birmingham city centre. Property in Birmingham city centre generates rental yields of around 5 per cent on average, with a 27 per cent growth in property value over the last four years.

Birmingham city centre attracts huge levels of demand from people who want to live within the hustle and bustle of the city. That’s why when it comes to property in Birmingham, city centre apartments make a lucrative solution, catering to demand from young professional tenants who want to be close to their workplace. With a number of regeneration projects in store for the area, including the new £700 million paradise development,  it’s likely that property growth will continue in the city centre.

Buy To Let Birmingham
Birmingham Property Investmen

Erdington

Population: 20,388

Average House Price: £179,050

Erdington is located to the north of the city centre, and is considered one of the best areas in Birmingham for affordable housing. The low prices in this suburb make it a good area to target for buy to let investment, especially student accommodation. Despite affordability, yields still stand at around 5 to 6 per cent, which makes Erdington a good option to consider when looking for property for sale in Birmingham.

Property price growth in Erdington reached a figure of 21 per cent since 2015, and with regeneration schemes in place for the coming years, it’s possible property prices will increase even further. Regeneration for this area includes the re-development of Central Square Shopping Centre and a remodelling of Wilton Indoor Market.

 Solihull

Population: 213,993

Average House Price: £350,857

Often thought of as the best place to live in Birmingham, UK crowds of higher-paying homeowners and tenants flock to Solihull. With an average rent of £1,028, tenants can expect to pay a lot more than they would compared to the average rent in Birmingham as a whole. Just a 30-minute drive to Birmingham, Solihull is a borough in its own but still considered part of the Birmingham area. The number of residents in Solihull comes to around 213,993, suggesting demand for rental property is high.

Therefore, although rental yields come to around 3 to 4 per cent on average, property investors should take advantage of the possibility of capital growth. According to data from the Land Registry, property values increased by 42.2 per cent from 2013 to 2018, suggesting possible continued growth in the future.

Property Investment Birmingham
Buy To Let Birmingham

Mosely and Kings Heath

Population:25,669 (according to the 2011 consensus)

Average House Price: £240,772

Mosely and Kings Heath are two suburbs located to the south of Birmingham. The two suburbs have separate average property prices, with an average of £214,485 in Kings Heath and £267,059 in Mosely. Mosely has a relatively new reputation as a fashionable Birmingham spot and is considered the best place to live in Birmingham for UK city living with a ‘village’ feel.

Both areas have seen slower house price growth than some other suburbs since 2015, with an increase of 15 to 19 per cent.

Digbeth

Population: 28,194

Average House Price: £235,517 (Rightmove data 2019)

Digbeth is one of Birmingham’s most coveted hotspots, with the Sunday Times naming it one of the coolest places to live in the UK. Located to the East of the city, Digbeth is home to many businesses in the creative and media industries, making it a popular location for young professionals.

Rental yields in Digbeth have risen in the last five years, now standing at between 5 to 6 per cent on average. Digbeth is part of the Eastside regeneration scheme in the city, wherein a new cultural quarter and public area will be created. Property prices in Digbeth have increased by 27 per cent since 2015, so the future looks bright in terms of capital appreciation over the coming years.

Property Investment Birmingham

Commonly asked questions on Birmingham investments

How large is Birmingham?

Birmingham is the second-largest city in the UK, with a size of 267.8 km² and a population of around 2,736,460 in the West Midlands region. The West Midlands region comes after Greater London which holds the top spot and is followed by Greater Manchester and West Yorkshire.

Is Birmingham good for property investment?

Birmingham is undoubtedly a good place to invest in property, often hailed one of the UK’s top buy to let areas. Birmingham property investment definitely makes a good option for investors seeking affordable property in an area with a large community of young people, increasing the demand from young professionals and student renters.

Is Birmingham better than other UK cities for property investment?

While property investments in Birmingham can be highly lucrative, you should still explore other UK investment options. Areas in the north-west like Manchester and Liverpool outrank Birmingham when it comes to buy to let, with higher average rental yields, stronger property price growth, and more extensive regeneration. Due to large student populations, these cities are also some of the best places to invest in student accommodation. If you’re serious about making attractive returns from your property venture, don’t ignore Liverpool and Manchester property investments.

Consider RW Invest for your UK buy to let investment

If you’re keen to take advantage of the opportunities available with UK property investment, make sure you take a look at our guide to some of the best investment properties available right now. Feel free to get in touch if you’re interested in starting your Manchester or Liverpool buy to let investment journey with RW Invest.

Where did we find our data?

The information used in our Birmingham property market guide was taken from external sources. Population statistics were found on the Birmingham City Council website, Centre for Cities, City Metric, and the Birmingham consensus. Rightmove, Zoopla and Totally Money were used for details on average Birmingham property prices.

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