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Birmingham Property Investment – Why Invest in Birmingham Buy to Let?

While London was once the primary 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, the West Midlands city of Birmingham has become more prevalent as a buy to let area. Birmingham property investment is now a very popular option.

If you’re looking to make a UK property investment, be sure to take some time to read this guide to buy to let in Birmingham. Here, we list some of the reasons why the Birmingham property market is becoming more popular with investors and cover the best areas to buy property in Birmingham. We also offer some of our latest investment opportunities for those seeking an investment property for sale in Birmingham. Keep reading to find out more.

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Why Invest in Birmingham?




Best Areas in Birmingham for Investment




Commonly Asked Questions on Birmingham Investments




Birmingham Property Investment for Sale: Our Latest Opportunities



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Birmingham city centre Birmingham city centre

Why Invest in Birmingham?

So why is property in Birmingham considered such a profitable 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 breakdown of each of the benefits of investing in Birmingham.

 

HSBC Headquarters in Birmingham HSBC Headquarters in Birmingham

1. 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, making Birmingham 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.

 

Young professionals in Birmingham Young professionals in Birmingham

One area in which Birmingham thrives 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 has created 1,000 jobs alongside Deutsche Bank, which has maximised 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 an excellent venture to consider due to the high levels of demand your property will experience. To target Birmingham’s high population of young professionals, you should look for properties in thriving city-centre locations, with proximity to transport links and desirable onsite facilities.

Central Birmingham Location

Snow Hill Wharf

Stunning Collection of Canal-Side Apartments

UK Prices from £227,500

5% Projected Rental Return

Central Birmingham Location

Birmingham Investment
Birmingham Prices from £249,950

5% NET Rental Return

Prime Business Location

Birmingham City University exterior Birmingham City University exterior

2. 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 20 universities within an hour of Greater Birmingham. Not only is Birmingham home to some world-class universities, but the vibrant nightlife scene and popular food and drink scene in the city have also contributed to Birmingham’s reputation as a student hotspot. From wallet-friendly clubs offering live music, to classy cocktail bars for a sophisticated night out, Birmingham students are spoiled for choice. For investors looking for an investment property for sale in Birmingham, exploring the student market alongside the residential property market is a smart and lucrative move.

The regent development exterior The regent development exterior

3. 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. As of January 2021, the average house price in Birmingham, according to Zoopla, is £253,380. When compared to cities in the south such as Brighton with an average property price of £458,003 and London with £903,112 average prices, it’s clear that those who purchase buy to let Birmingham property can get more for their money than they would when investing in other UK cities.

While properties are priced low in Birmingham, rental costs have been increasing as of late. When analysing past and current rental price statistics on Zoopla, the average asking rent for Birmingham has risen by 18% since July 2019. Back in July 2019, the average rental cost for a Birmingham property stood at £786. By January 2021, the average figure has risen to £930. This is the reason behind Birmingham’s current average rental yields of 4.4%. Although the average rental yield is a little lower than the returns available in cities such as Liverpool, which boasts average yields of over 5%, it’s still higher than London’s 3.5% average.

Some of the best areas of Birmingham for high rental returns are often those popular with student tenants. Places like the B4 postcode can bring in yields as high as 11.66%. If you’re planning to buy property in Birmingham for an investment, researching the best areas in Birmingham for rental yields is crucial if you want to secure the most attractive returns.

4. Invest in Birmingham for Capital Growth

Birmingham’s economy is worth £23.2 billion, having grown at a rate of 16.3% 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. In 2010, a large scale regeneration scheme was announced, known as the Birmingham Big City Plan. This Big City Plan was to see Birmingham city centre transformed under a 20-year long masterplan, which would create over 50,000 new jobs and contribute £2.1 billion to the economy each year.

 

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Birmingham Bull Ring building Birmingham Bull Ring building

Some of the most notable regeneration projects to happen in Birmingham 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 prominent 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. Today, it’s one of the UK’s busiest shopping centres, with around 36.9 million visitors 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.

HS2 construction in Birmingham HS2 construction in Birmingham

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

Regeneration is essential for a city when it comes to investments, as it suggests further market growth is on the horizon. Cities with extensive re-development can help local properties grow in value, in line with the growing appeal of the area.

Birmingham aerial view Birmingham aerial view

The property investment Birmingham offers is likely to experience ongoing capital growth over the coming years. Birmingham house prices have been rising at three times the national average, with an increase of 5.6% between October 2017 to October 2018.

Over 2020, a lot of uncertainty has surrounded the UK property market due to the Covid-19 pandemic. However, property prices in Birmingham rose by around 2.5%, according to data from the Land Registry House Price Index. Predictions from Savills have suggested that the West Midlands will see new growth of 21.7% over the next five years, hinting at a bright future for property investment in Birmingham.

Birmingham city centre attracts significant demand from people who want to live within the city's hustle and bustle. That's why for those looking to buy property in Birmingham, city centre apartments make a lucrative solution, catering to demand from a young professional demographic of tenants who want to be close to their workplace.

Amy Jackson

Best Areas in Birmingham for Investment

When finding a property to let in Birmingham, it’s essential 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 if you’re planning to buy property in Birmingham for your investment.

Birmingham City Centre evening view Birmingham City Centre evening view

Birmingham City Centre

Population: 25,800 (Centre for Cities estimate)

Average House Price: £271,855

At the heart of the city is Birmingham city centre. Property in Birmingham city centre can generate around 5% rental yields on average, with a 27% growth in Birmingham property values seen over the last four years.

Birmingham city centre attracts significant demand from people who want to live within the city’s hustle and bustle. That’s why for those looking to buy property in Birmingham, city centre apartments make a lucrative solution, catering to demand from a young professional demographic of tenants who want to be close to their workplace. With several regeneration projects in store for the area, including the new £700 million paradise development, property growth will likely continue in the city centre. This is good news for investors as it will lead to some attractive capital growth returns from Birmingham investment.

Erdington

Population: 20,388

Average House Price: £212,244

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 an excellent location for buy to let Birmingham investment, especially student accommodation. Despite the affordability, yields still stand at around 5 to 6%, making Erdington a fantastic option to consider when looking for property for sale in Birmingham.

When it comes to Birmingham property prices, property price growth in Erdington reached a figure of 21% since 2015. 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 remodelling of Wilton Indoor Market. Projects like these are likely to increase demand and interest in the area and boost the appeal of buy to let Birmingham.

Solihull town centre Solihull town centre

Solihull

Population: 213,993

Average House Price: £318,551 

Often thought of as one of the best areas in Birmingham to live, UK crowds of higher-paying homeowners and tenants flock to Solihull. With rents as high as £1000 a month, tenants can expect to pay more in Solihull compared to the average rent of the Birmingham property market 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 Solihull residents comes to around 213,993, suggesting demand for rental property is high in this Birmingham investment area. Therefore, although rental yields come to about 3 to 4% on average, Birmingham property investors should take advantage of the possibility of capital growth. According to data from the Land Registry, property values increased by 42.2% from 2013 to 2018, suggesting possible continued growth in the future for those who buy property in Birmingham.

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Moseley at night Moseley at night

Moseley and Kings Heath

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

Average House Price: £297,426 – £302,991

Moseley and Kings Heath are two suburbs located to the south of Birmingham. The two suburbs have separate average property prices, with £297,426 in Kings Heath and £302,991 in Moseley. Moseley has a relatively new reputation as a fashionable choice within the Birmingham property market and is considered the best place to live in Birmingham for UK city living with a ‘village’ feel.

Both areas have seen slower growth with Birmingham property prices than some other suburbs since 2015, with an increase of 15 to 19%.

Digbeth neighbourhood in Birmingham Digbeth neighbourhood in Birmingham

Digbeth

Population: 28,194

Average House Price: £224,104

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. This is ultimately boosting demand for rental property and increasing the appeal of buy to let in Birmingham.

Rental yields in Digbeth have risen in the last five years, now standing as high as 5-6%. Digbeth is part of the Eastside regeneration scheme in the city, wherein a new cultural quarter and public area will be created. As for Birmingham property prices, those in Digbeth have increased by around 27% since 2015, so the future looks bright in terms of capital appreciation over the coming years.

Commonly Asked Questions on Birmingham Investments

While property investments in Birmingham can be highly lucrative, you should still explore other UK investment options. Even places that are considered the best areas in Birmingham can offer lower yields than certain other UK cities. Those searching for a property to buy in Birmingham should also learn about different areas worth investing in.

When it comes to UK investments, the North West has been considered the best region to invest in over recent years. Home to Liverpool and Manchester, the North West regularly makes property investment news due to the region’s combination of some of the highest rental yields, fastest growth, and strongest rental demand, resulting in some highly lucrative buy to let options.

While the highest rental yields in Birmingham appear to reach around 6%, Liverpool boasts returns of up to 10% in its L1 postcode. Those who are interested in building a lucrative property portfolio should consider looking for an investment property for sale in Birmingham alongside purchasing buy to let property in the North West, too. Due to large student populations, these cities are also some of the best places to invest in student accommodation.

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.

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

Many investors are choosing Birmingham property investment over London buy to let. While London remains one of the economic powerhouses of Europe, and a great city for tourism, business, education and more, the property market of the British capital is underperforming when compared to other UK cities. One of the biggest factors in the growing popularity of buy to let in Birmingham over London is the fact that property is a lot pricier in the capital. According to Zoopla, the average asking price of a two-bedroom flat in London comes to over £600,000, which is well above the budget of many investors.

The returns investors can expect from London property are also low compared to investments in the Birmingham property market and the property market of other cities in the UK, both in terms of rental yields and capital growth. By 2024, property prices in London are expected to grow by 12.7% according to Savills predictions, which is lower than the UK average of 20.4%. Birmingham property prices are set to see higher growth of 21.7% in the West Midlands region.

Those who seek out an investment property for sale in Birmingham can benefit from a thriving UK city with potential for strong yields and capital growth. That said, if you’re serious about making attractive returns from your property venture, don’t ignore Liverpool and Manchester property investments alongside your Birmingham property investment venture.

Whether you should buy a property in Liverpool or Manchester instead of Birmingham depends on your budget and the amount of money you’re willing to spend to get the best returns possible. Liverpool prices are lower than Birmingham property prices, making the area naturally more appealing to those who have a smaller budget. However, building a diverse property portfolio is always a good idea, which means exploring opportunities for property to buy in Birmingham and the North West, can be a great option.

If you’re looking to invest in 2021, Birmingham property investment is a fantastic choice. With strong house price growth on the horizon according to Savills, and some exciting regeneration schemes and new developments coming to the city, Birmingham investment is likely to grow even more popular as the years go on.

Birmingham and the Birmingham property market are expected to generate a lot of attention by 2022, thanks to the Commonwealth Games. Starting on 27th July 2022, the Commonwealth Games will be held in Birmingham and are expected to attract over one million spectators. This will no doubt boost the economy of the city and encourage further investment.

Around 4,500 jobs a year are predicted to be created by the Commonwealth Games by 2022. By investing in Birmingham in 2021, you can take advantage of this city’s upcoming growth and purchase property at a lower rate before prices increase over time.

How Does Birmingham Property Investment Compare to Opportunities in Other UK Cities?

While property investments in Birmingham can be highly lucrative, you should still explore other UK investment options. Even places that are considered the best areas in Birmingham can offer lower yields than certain other UK cities. Those searching for a property to buy in Birmingham should also learn about different areas worth investing in.

When it comes to UK investments, the North West has been considered the best region to invest in over recent years. Home to Liverpool and Manchester, the North West regularly makes property investment news due to the region’s combination of some of the highest rental yields, fastest growth, and strongest rental demand, resulting in some highly lucrative buy to let options.

While the highest rental yields in Birmingham appear to reach around 6%, Liverpool boasts returns of up to 10% in its L1 postcode. Those who are interested in building a lucrative property portfolio should consider looking for an investment property for sale in Birmingham alongside purchasing buy to let property in the North West, too. Due to large student populations, these cities are also some of the best places to invest in student accommodation.

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

London vs Birmingham Property Investment - Which Is Better?

Many investors are choosing Birmingham property investment over London buy to let. While London remains one of the economic powerhouses of Europe, and a great city for tourism, business, education and more, the property market of the British capital is underperforming when compared to other UK cities. One of the biggest factors in the growing popularity of buy to let in Birmingham over London is the fact that property is a lot pricier in the capital. According to Zoopla, the average asking price of a two-bedroom flat in London comes to over £600,000, which is well above the budget of many investors.

The returns investors can expect from London property are also low compared to investments in the Birmingham property market and the property market of other cities in the UK, both in terms of rental yields and capital growth. By 2024, property prices in London are expected to grow by 12.7% according to Savills predictions, which is lower than the UK average of 20.4%. Birmingham property prices are set to see higher growth of 21.7% in the West Midlands region.

Should I Buy Property in Birmingham or Choose the North West Instead?

Those who seek out an investment property for sale in Birmingham can benefit from a thriving UK city with potential for strong yields and capital growth. That said, if you’re serious about making attractive returns from your property venture, don’t ignore Liverpool and Manchester property investments alongside your Birmingham property investment venture.

Whether you should buy a property in Liverpool or Manchester instead of Birmingham depends on your budget and the amount of money you’re willing to spend to get the best returns possible. Liverpool prices are lower than Birmingham property prices, making the area naturally more appealing to those who have a smaller budget. However, building a diverse property portfolio is always a good idea, which means exploring opportunities for property to buy in Birmingham and the North West, can be a great option.

Is Birmingham Property Investment a Good Option for 2021 and Beyond?

If you’re looking to invest in 2021, Birmingham property investment is a fantastic choice. With strong house price growth on the horizon according to Savills, and some exciting regeneration schemes and new developments coming to the city, Birmingham investment is likely to grow even more popular as the years go on.

Birmingham and the Birmingham property market are expected to generate a lot of attention by 2022, thanks to the Commonwealth Games. Starting on 27th July 2022, the Commonwealth Games will be held in Birmingham and are expected to attract over one million spectators. This will no doubt boost the economy of the city and encourage further investment.

Around 4,500 jobs a year are predicted to be created by the Commonwealth Games by 2022. By investing in Birmingham in 2021, you can take advantage of this city’s upcoming growth and purchase property at a lower rate before prices increase over time.

Birmingham Property Investment for Sale: Our Latest Opportunities 

Snow Hill Wharf 

Prices from £227,500

5% Projected Rental Returns

Made up of six stylish developments, The Colmore, The Regent, The Fazeley, The Lancaster, and The Barker, Snow Hill Wharf is an exciting new property development based in the heart of Birmingham. A masterplan from developer St Joseph, part of the Berkeley Group, this development will be based a short distance from top Birmingham attractions such as the business district and the jewellery quarter.

Located in the B4 postcode, this city-centre development is ideal for tenants who want to enjoy the combination of serene waterside living and the hustle and bustle of the city. Each apartment within Snow Hill Wharf will be finished to the highest standard, featuring modern and luxurious designs and desirable facilities such as an onsite cinema room and gym.

Consider RWinvest 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 purchasing Birmingham buy to let property, or starting your Manchester or Liverpool buy to let investment journey with RW Invest.

Disclaimer:

This guide to Birmingham property investment was last updated in January 2021. 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.

Central Birmingham Location

Snow Hill Wharf

Stunning Collection of Canal-Side Apartments

UK Prices from £227,500

5% Projected Rental Return

Central Birmingham Location

Birmingham Investment
Birmingham Prices from £249,950

5% NET Rental Return

Prime Business Location

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