Are you thinking about investing in property? There are many reasons Birmingham is considered a great location. In this Birmingham property investment guide, we will provide you with all the information that you need to get started on your property investment journey in Birmingham. Find out insider tips, plus some good up-and-coming investment locations in the city. This guide is broken down into several sections for your convenience, including:
- Why Invest in Properties in Birmingham?
- Understanding the Birmingham Property Market
- Where to Find Investment Properties in Birmingham
- Benefits and Risks of Investing in Birmingham Property
- How to make money by investing in Birmingham Property
Why Invest in Properties in Birmingham?
The UK’s Second Biggest City – And Economy
Not many people realise that Birmingham is the second biggest city in the UK, behind London. And it has an economy to match, with a value of £31.9 Billion. After a hasty rebuild following WWII, Birmingham was in desperate need of regeneration – that’s where 2010’s ‘Big City Plan’ came in. An aspirational framework and healthy injection of cash into developing the city centre has made Birmingham an enviable city with economic growth well above national levels and unemployment at an all-time low. After the renovation of city landmarks such as New Street Station and Bullring shopping centre, this post-industrial city is a hot ticket for budding property investors. The Big City Plan is still in action until 2030 and has already surpassed its initial goals. Birmingham has a population of approximately 1.1 million residents. Yet, when you consider the broader West Midlands sphere, a staggering 5.57 million people call it home, contributing to an economy poised to meet or even eclipse the UK’s average annual GVA growth of 2.1% between 2024 and 2026. And Birmingham’s momentum doesn’t stop there: its population is projected to surge by 7.8%, reaching a dynamic 1,230,000 by 2038.
Booming Property Prices
Property prices have risen exponentially over the past few years – an impressive 29% over the last 5 years. Compared to London’s modest growth of 9% this is even more astounding. JLL forecasts further growth of 19.2% by 2027, meaning that now is a great time to invest in property in Birmingham.
Birmingham is the Midlands’ biggest transport hub and has some excellent transport links including road, rail and air. The bustling Birmingham New Street Station in the city centre allows for swift rail travel all over the UK. Multiple trains depart from Birmingham to London every hour and the journey takes just 2 hours, or even 1 hour and 20 minutes on the ‘fast’ train. A light rail system also connects the city centre with Wolverhampton, West Bromwich and Wednesbury with plans to even more locations such as Walsall and Stourbridge. Birmingham’s international airport has direct flights to over 120 destinations.
A Rich Heritage and Culture
Birmingham has grown from a market town in the centre of the UK to a major cultural player, home to major institutions including the City of Birmingham Symphony Orchestra, Birmingham Royal Ballet, Birmingham Repertory Theatre, Library of Birmingham and Barber Institute of Fine Arts. Birmingham is also the hometown of Black Sabbath, Judas Priest, Duran Duran, The Streets, and more, and enjoys a vibrant local music scene currently. Birmingham is very culturally diverse and boasts large Indian, Chinese and Afro-Caribbean populations. It also has the most Michelin-starred restaurants outside of London.
Large Student Population
Birmingham has a vibrant and burgeoning student population of over 80,000, thanks in large part to its five esteemed universities – Aston University, University of Birmingham, Birmingham City University, University College Birmingham and Newman University. These institutions play a pivotal role in making the city a prime location for property investment, especially in the student accommodation sector. Due to the perennial need for student accommodations, landlords often enjoy competitive rental yields as high as 8.6% and lower vacancy rates compared to other residential investments.
Birmingham boasts the headquarters of engineering powerhouse IMI plc, the innovative Mobico Group, Patisserie Valerie, Claire’s, and Mitchells & Butlers. Birmingham stands tall with the highest concentration of significant companies outside of the London and South East nexus, including Gymshark and Severn Trent Water. Given its state-of-the-art facilities like the National Exhibition Centre and the International Convention Centre, it’s no surprise that Birmingham attracts a massive 42% of the UK’s entire conference and exhibition traffic. Up to 40% of Britain’s jewellery business is traded through Birmingham’s world-famous Jewellery Quarter, which houses 150 jewellers and crafters.
Understanding the Birmingham Property Market
Birmingham is a prime destination for property investors, but making a serious profit requires meticulous groundwork. Take a close look at the latest assessments of Birmingham’s housing market and seek insights from industry experts before making your move.
Birmingham is making impressive strides, thanks to leading national job creation, an admirable 41% graduate retention rate, and a significant £1 billion infusion from the Big City Plan. The property landscape is particularly noteworthy. HM Land Registry data reveals that house prices have seen a substantial increase of 69% from 2013 to 2023.
According to the JLL Cities Index, Birmingham’s property prices, especially those sought-after two-bedroom flats, have risen by a commendable 27% since the end of 2017. Additionally, from June 2021 onwards, the annual growth rate has consistently been around 5%, bringing current property values to a healthy 10.5% above pre-pandemic figures. With Birmingham’s growing reputation and robust job market, there’s a marked uptick in rental demand, especially in the city centre. JLL forecasts a potential increase in rents by 19.3% by 2027. For investors considering Birmingham property investment, the numbers and trends paint a promising picture of the city’s thriving property market.
How to Find Investment Properties in Birmingham
Locating the perfect investment properties in Birmingham requires a combination of strategic planning and invaluable insider insights. Adhere to these essential steps to pave your way to uncovering investment opportunities within the heart of Birmingham. Remember, fostering local relationships, clarifying your investment ambitions, and delving deep into the city’s nuances will anchor your venture solidly.
Define Your Investment Goals
Start by figuring out what your investment goals are before embarking on your Birmingham property investment journey. Are you scouting for properties poised for rental revenue or ones expected to appreciate over time? Have you earmarked funds for potential renovations? Are you using a mortgage for your investment, or is your capital at the ready? Thinning about these things will streamline your search, ensuring you zone in on properties that align with your vision.
Make Beneficial Connections
Immerse yourself in Birmingham’s real estate circles. These experts can spotlight potential goldmines and caution against potential pitfalls. Nurturing such ties in the Birmingham property world might grant you access to clandestine deals or off-market properties, escaping the usual advertising circuit.
Know Where To Look
Maximise online platforms, dedicated property websites, and real estate portals as your arsenal in seeking Birmingham investment property. These tools offer the advantage of tailoring your search via filters like budget, type of property, and locale. You can view detailed property listings, and tap into core property data easily.
Do Your Due Diligence
Empower yourself with rigorous research into Birmingham’s property pulse and the city’s evolving landscape. While we’ve spotlighted certain emerging locations for property investment in Birmingham, keep in mind – an informed investor always dives deeper with independent studies.
Top Locations for Investment Properties in Birmingham
Digbeth, once dominated by industrial warehouses and factories, has transformed into Birmingham’s artistic hub. Fusing its industrial heritage with a splash of contemporary artistry, Digbeth now boasts chic shops, cafes, and event venues, with many of its old warehouses revitalised into stylish apartments.
Earning the title of “Coolest Neighbourhood in Britain” by the Sunday Times, Digbeth’s regeneration seamlessly melds its gritty past with modern artistic vibes. This lively urban pocket shines for its flourishing art and music landscape. From quirky independent shops to bustling cafes and bars, it’s an area pulsating with energy. Notable transformations include the iconic Custard Factory, once the heart of Bird’s Custard production, now reborn as a sprawling 15-acre hotspot filled with shops, eateries, event spaces, and digital businesses.
With its appeal growing amongst young creatives, Digbeth’s property market is also on the rise. The average property price, standing at £180,000, has seen a notable 19% leap within a year. For investors with an eye on potential growth, Digbeth surely presents an enticing opportunity.
Holloway Head, nestled in Birmingham’s city centre near the Chinese Quarter, is fast gaining traction, much like its counterparts Digbeth and the Jewellery Quarter. This prime location, a stone’s throw from the iconic Bullring shopping centre and New Street Station, amplifies its allure. Recent regeneration efforts have spurred the construction of lavish penthouses. Many anticipate Holloway Head evolving into a “millionaire’s row.” The High Street Group has also unveiled plans for a sprawling 487-unit residential complex, complemented by commercial spaces and parking.
Given its strategic location, Holloway Head is a magnet for young professionals, making it a hotspot for connectivity and lifestyle amenities. The current rejuvenation projects and impending developments signal a golden opportunity for investors considering venturing into Birmingham investment property. City centre properties, as expected, command a premium over suburban locations, but Holloway Head presents an enticing investment proposition.
Edgbaston, slightly away from the city’s hustle and bustle, is a green suburb ideally positioned near the city centre and the University of Birmingham, making it a magnet for families and students. It offers investors versatility in rentals, especially with the right HMO licences. For those keen on buy-to-let in a growth-proven area, Edgbaston is the spot. Its charm is amplified by attractions like the Edgbaston Cricket Ground, Victorian Botanical Gardens, and Cannon Hill Park. As a sought-after affluent area, selling your property should be a breeze.
Last year, flats in Edgbaston averaged £208,555, while terraced homes and semi-detached homes fetched around £299,345 and £418,879, respectively. Prices rose by 5% from the previous year and 15% from the 2020 peak. Though the entry point may be higher than in some areas, the appeal of Edgbaston ensures steady demand, with average monthly rents at £1,595. Given its offerings and property quality, Edgbaston stands as a prime choice for Birmingham property investors.
Rich in history and charm, the Jewellery Quarter with its 200 listed buildings stands as a testament to Birmingham’s heritage. Originating in the 18th century, it houses Europe’s grandest assembly of jewellery-specific Victorian and 20th-century structures.
The Jewellery Quarter is a buzzing hub for the city’s creatives, boasting a blend of contemporary businesses, museums, and vibrant nightlife. Highlighting this modern shift, developments like Heaton Lofts are turning investor heads. From its industrial roots, the area has seen vast rejuvenation, now dotted with hip bars, eateries, and trendy outlets, especially towards St Pauls Quarter, making it a hotspot for the city’s young professionals. As of May 2023, the average property price in the Jewellery Quarter sits at £383,059 according to Zoopla.
Located just four miles from Birmingham city centre, Selly Oak has evolved from a family-centric space to a student hotspot, promising investors solid rental returns and a flourishing economy. Its recent additions such as newly built shopping centres, coupled with its dynamic energy, make it a sought-after living destination. This lively locale stands out as one of Birmingham’s most up-and-coming spots, making property investments here a smart move, especially with enticing rental yields of 7.10%.
Selly Oak is the goldmine for investors targeting Birmingham’s student rental sector. Dominated by terraced houses – most now student homes – it’s earned its title as the ‘student village’. After their freshman year in halls, many university students flock here, amplifying the demand. Last year, sales of terraced properties in Selly Oak averaged £264,404.
Benefits and Risks to Birmingham Property Investment
Birmingham presents a compelling case for property investment. There’s the appeal of cost-effective opportunities, continued urban renewal projects, an ever-growing populace, and a lively city ambience that attracts young professionals. However, it’s prudent to note that, like any market, Birmingham’s property scene isn’t without its pitfalls. Here are some potential advantages and hazards to consider when mulling over investments in Birmingham’s property sector.
High Rental Yields
Birmingham’s property market doesn’t just promise solid long-term appreciation – it’s a jackpot for those eyeing consistent income streams. As per data from home.co.uk, Birmingham’s average rent stands at £1,511 PCM. Birmingham investment property can offer gross rental yields of about 7.34% (before deducting expenses). This figure is impressive, rivalling London’s 7.60% and easily surpassing the UK’s average of 4.87%. For those exploring student accommodation investments in Birmingham, the potential returns are even more enticing given the more affordable property price tags.
Student and Graduate Population
Birmingham hosts a whopping 80,000 students, translating into a goldmine for those investing in student properties. After graduating, 41% of these students choose to remain in the city, lured by promising job prospects and a vibrant nightlife. Though student housing experiences frequent tenant changes, there’s a perennial demand, ensuring there’s always a fresh batch of scholars seeking homes during their stay in Birmingham.
A Competitive Environment
While the city presents a plethora of investment avenues, the fierce competition means that coveted Birmingham investment property often gets snapped up quickly. As everyone vies for a slice of Birmingham’s booming property market, investors might find it a tad challenging to pinpoint properties that perfectly align with their vision and investment goals. Moreover, this increased demand has a ripple effect on the financing sector. With many seeking out the best financing deals, securing loans or mortgages at advantageous rates becomes more challenging.
Laws and Regulations
Navigating the intricate legal framework of property investment demands a sharp understanding and astute awareness of laws and regulations in the housing market. For investors considering Birmingham property investment, especially those dipping their toes into the city’s property market for the first time, these layers of legalities can seem daunting. The specificities of property rights, tenant agreements, zoning restrictions, and more can be a minefield if not trodden upon with caution. Overlooking a local regulation, misinterpreting a legal requirement, or simply being unaware of certain mandates could lead to significant setbacks in your Birmingham property investment journey.
How to make money by investing in Birmingham Property
When investing in Birmingham property, foresight, preparation, and a well-defined roadmap are your trusted allies. Start by deciding on your goals. Are you leaning towards a long-term horizon, acquiring properties with an eye on future appreciation, especially if the current trends continue? Or are enticed by the idea of transforming a distressed property, breathing new life into it through refurbishment, and then positioning it in the market at a premium? There’s also the avenue of steady income generation by renting out properties, catering to either residential tenants or commercial enterprises. Either way, planning ahead and deciding on your goals is paramount to success.
Do Your Research
Be diligent with your research! Taking the leap into property investment without adequate understanding can be risky, so invest time in familiarising yourself with Birmingham’s property landscape. It’s beneficial to visit potential areas multiple times and consult with local real estate experts. Remember, the property market is ever-changing, and staying updated on its shifts is crucial for sustained success.
Stick to a Budget
It’s common to become excited by investment prospects, and you might quickly find your budget depleted. Remember, unexpected expenses can arise, so it’s wise to have a reserve fund for unforeseen events. Property investment typically requires patience, as returns may not be immediate. Stay committed and give it time; your patience is likely to be rewarded in the long run.
Be Positive and Learn From Mistakes
Approaching property investment with the right mindset is essential and the same applies when it comes to Birmingham property investment. While diligence plays its part, nurturing a proactive and optimistic attitude will guide you through hurdles, open doors to new opportunities, and drive success in Birmingham’s property scene. Hiccups and obstacles are inevitable, but view them as learning moments. Venture beyond your usual boundaries, consider fresh investment strategies, and remember: challenges are stepping stones, not stop signs.