The increase in stamp duty for buy to let investors and those looking to purchase a second home has swayed many from the market. It is now more expensive to invest, and many landlords are worrying...
Buy To Let Property Investments in Birmingham
New Buy to let properties in Birmingham
Searching for new buy-to-let apartments for sale in Birmingham? Start by tracking the regeneration of Birmingham throughout the years you will see the Birmingham house price growth have increased fastest in the Jewellery Quarter regeneration area with prices rising 25% over five years.
If you want to buy off-plan developments in Birmingham, citywide property hotspots are unveiled in the best areas to invest in property in Birmingham.
One up-and-coming area of Birmingham that seems particularly popular with young adults is Digbeth. Regeneration in Digbeth has enticed independent cafes, bars and shared workspaces to set up business, and the area was recently crowned the "Coolest Neighbourhood in Britain".
As the UK’s second City Birmingham is compared vs Manchester and London; on many levels it is still worth investing in because infrastructure changes, regeneration and transport improvements growth.
We feel that recent regeneration is making areas like Digbeth an attractive place to live and that property in Birmingham will make a good buy to let investment and we hope you do too.
Birmingham Investment Property Market
Buy To Let Property Investment in Birmingham Opportunities
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Birmingham is often affectionately known as Britain's Second City, and for good reason. It's Britain's second largest city by population and has the second largest city economy outside London. More businesses are moving to the city, and consequently young professionals.
As Birmingham regenerates and more people are looking to relocate, we analyse where exactly the best areas to invest in property in Birmingham are, whether you are looking for high capital growth or good rental yields, read our report to find out where the best areas to invest in Birmingham are =>
Where should you invest in property in Birmingham?
Birmingham has recently come into the spotlight as a promising place to invest in property. With the arrival of HS2, it is set to become even better connected, and regeneration has meant that people are now comparing Digbeth to London’s hip Shoreditch. Where are the best areas to invest in property in Birmingham? Should you invest in an area that has undergone regeneration, or should you invest in an area that has until recently remained in the shadows?
- Is Birmingham a Good Place to Invest?
- Birmingham’s Booming Business Sector
- Birmingham’s Cultural Offerings
- Birmingham’s Young Population
- Birmingham house price growth
- Best areas to buy property in Birmingham
- Is it still worth investing in property in Birmingham?
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Is Birmingham a Good Place to Invest?
Many people will wonder whether Birmingham is a good place to invest in property. Birmingham is widely known as the UK’s second city, yet its still affordable compared to London. The average property price is £204,929 according to Zoopla, compared to London at £653,965. House prices are over three times as much in London, yet the average wage has not kept pace. In London, the average wage is £37,000, and in Birmingham it is £29,000. The relationship between wages and demand for housing cannot be underestimated, if people cannot afford housing, the demand will go down and so will the prices, it is why now when wages are not rising the housing market in London is stagnating.
Birmingham’s Booming Business Sector
Another driver of property price is regeneration and business growth. People are always going to chase jobs, and they want to live in an exciting location with plenty of cultural entertainment on their doorstep, good transport links and facilities. In recent years Birmingham has welcomed HSBC and Deutsche Bank offices, and HSBC is now one of the city’s largest employers. Pricewaterhousecooper has already signed the lease on offices in one of the largest schemes in the city centre, Paradise Birmingham.
Along with business relocation, there are the numerous redevelopment projects. From Paradise Birmingham, to the regeneration of Digbeth and the introduction of HS2, Birmingham is constantly evolving and providing a better living experience for its residents.
Birmingham’s Cultural Offerings
Birmingham also offers a wealth of cultural experiences for residents and visitors alike. Outside of London, Birmingham is home to the most Michelin-starred restaurants and has a thriving arts scene. More tickets are sold at the Birmingham Hippodrome than by another theatre, including the West End. It also boasts the unique Jewellery Quarter, home to Europe’s largest school of jewellery, and the UK’s second oldest independent art gallery, the Royal Birmingham Society of Artists. The Jewellery Quarter is another area in Birmingham that has been pinpointed for regeneration, with the aim to develop the Quarter into a hub for creative businesses.
Having a colourful arts and culture scene provides a huge benefit to cities in terms of attracting new residents and boosting tourism. Galleries, museums, and theatres help enrich the lives of current residents and these attributes makes the area a more appealing place to live.
Birmingham’s Young Population
40% of Birmingham’s residents are under the age of 25, making up the core rental market. It also has the 4th highest graduate retention rate with 41% of its students choosing to stay in the city. This is ideal because upon graduating, they will need to rent property until they have saved a deposit to buy. This means that investors will have a consistent stream of tenants and then a market to sell to.
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Birmingham house price growth
With all the potential, it is no wonder that Birmingham house price growth has accelerated above the national average. Since 2016, property prices have increased by 16% which is the highest in the UK. They are meant to increase by a further 15% by 2023.
Best areas to buy property in Birmingham
If you want to know whether Birmingham is a good place to invest in property, the answer is yes. If you are looking to achieve capital growth, property prices are rising faster than other UK areas. Rental yields also outperform the national average at 5%. Successfully investing in Birmingham does depend on where you invest in Birmingham. Here is our definitive list of where to invest in property in Birmingham.
Holloway Head has been compared to Digbeth and the Jewellery Quarter, but up until recently has not enjoyed the same amount of exposure as the other two. Holloway Head is situated in Birmingham’s city centre, close to the Chinese Quarter. Its location marks out some of its appeal, being just a short walk away from the Bullring shopping centre and New Street Station. Recently it has been undergoing some amount of regeneration, with plans to build large penthouses. It is already home to the most expensive penthouse in Birmingham, and people have forecasted that the area may turn into a “millionaire’s row.” The High Street Group are also planning a 487-unit residential apartment scheme with commercial space and parking.
With large residential schemes cropping up in the area and a coveted location, surely now is the time for individual investors to consider property in Holloway Head.
Digbeth Regeneration has really started gathering pace now, it has been named the “Coolest Neighbourhood in Britain” by the Sunday Times. Regeneration has combined its industrial past with artistic influences. It is a vibrant inner-city area known for its art and music scene. It is home to a range of independent shops, cafes, and bars. Warehouses are being converted into homes and shared office space, and the Custard Factory (previously a Bird’s Custard Factor) has been transformed into 15 acres of shops, restaurants, event space and digital enterprises.
Digbeth is becoming more attractive to young creatives and property prices reflect that, although the average is still relatively modest at £150,389, it has jumped 19% in a year. Perhaps it is time investors consider Digbeth to take advantage of rising property prices too.
Westminster Works is one property investment opportunity in Digbeth. Westminster Works comprising 220 high-spec one-and-two-bedroom apartments. The development comes with a wealth of amenities including a concierge service, 24/7 security service, Sky Lounge access and smart technology. Apartments start from £178,420 and a 6% rental yield is thought to be achievable. Westminster Works is due to complete Q1 of 2022, and investors can utilise payment plans offered by the developer as just a 15% deposit is required up front.
Perhaps a little outside of the centre compared to the first two areas, Erdington is still just a 12-minute journey to Birmingham’s city centre. It has its own high street, which is getting a huge revamp to include a cinema, restaurant quarter and public square and a £7.5 million leisure centre. The council is also vying for £42 million or private investment to ensure the plans can go ahead and be expanded upon.
Once this Erdlington regeneration project gets underway, we can property prices in the area begin to rise, especially as it already occupies an advantageous location in the city with plenty of transport links.
Erdington is popular with students which explains why rental yields that can be achieved are usually higher compared with other areas at 5-6%. According to Zoopla, average property prices are £164,759.
Further out of the city you have Edgbaston. It is a leafy suburb, but its proximity to the city centre and the University of Birmingham makes it an ideal location for families and students alike. This means investors will have more option to who they rent the property if correct licences are obtained for HMO rentals.
Edgbaston is not lacking with regards to cultural activities, it is also home to Edgbaston Cricket Ground, independent bars and cafes, Victorian Botanical Gardens, Midlands Art Centre, and Cannon Hill Park. With all its offerings, it is understandably already a coveted affluent area so there will be no shortage of willing buyers when it comes to selling your property.
Average property prices in Edgbaston have increased by 39.04% over the past ten years to £295,700. Although that is a higher entry point compared to most areas on our list, it is important to note the appeal of Edgbaston and its stock. Rents have kept in line with property price increases, with average monthly rents standing at £1,014. The quality of properties in Edgbaston offer some degree of security to investors as it will always be in demand. This makes Edgbaston one of the best places to buy a house in Birmingham.
Perry Barr will be regenerated for the 2022 Commonwealth Games. A couple of the proposed projects include an upgrade of the railway station and a new interchange, new housing developments, improved sports and leisure facilities, a new secondary school and sixth form and road improvements. Such as what happened with the London docklands and Stratford area with the 2012 Olympics, we can envisage an increase in desirability once the regeneration takes effect.
Over the last ten years, property prices have risen by 39%, and as regeneration projects begin to take effect, we think demand for rental property in the area will increase. Read our buy-to-let property guide to understand why it is a great time to be investing in UK property.
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Jewellery Quarter Regeneration
The Jewellery Quarter is a central district in Birmingham that derives its heritage from the jewellery trade. At its peak over 30,000 people were employed in the area, and today it still accounts for 40% of all jewellery made in the UK. Due to the decline in the industry, it has been redeveloped into a vibrant hub of creative businesses.
The Jewellery Quarter regeneration was one of the first due to its close proximity to the city centre; new offering of museums, bars and restaurants has attracted waves of young creatives to the area. This has increased demand for property in the area, and as such prices have increased by 28% over the past three years – making it one of Birmingham’s most coveted districts.
The Jewellery Quarter is an established Birmingham property hotspot, which gives investors some degree of certainty regarding its appeal.
JQ Rise is one opportunity in the Jewellery Quarter. It is a new development comprising 226 one, two & three bed apartments between £199,995 - £449,995. The estimated yield is 5.5% and it is due to be completed in Q2 of 2022. Payment plans are available and just a 5% deposit is required.
Is it still worth investing in property in Birmingham?
There is still plenty of potential in for investing in Birmingham Property. Regeneration projects such as Paradise Birmingham and the Big City Plan are still underway, which will encourage more people to move to the city for employment. Its demographic is perfectly poised for renting and later buying property in Birmingham regeneration projects.
Property prices in Birmingham have been on the up since regeneration projects have started, but they are still considerably lower in comparison to other key cities such as London and Manchester. With its employment and entertainment offerings, more people are expected to move to the city. As housing remains affordable, there is still scope for increase which is why the time to invest in Birmingham is now.
If you are looking for Birmingham buy to let property, speak to one of our investment consultants today. They will present new development opportunities across the city, not listed on our website.
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