Complete 2023 Guide.

Birmingham
Property Investment

Birmingham Investment Property

Welcome to property investment in Birmingham, one of the UK’s most exciting and vibrant cities.

After decades of regeneration efforts, this West Midlands powerhouse has been transformed into a world-class opportunity in the UK property market.

If you’re a UK or overseas property investor looking for exceptional growth potential with promising predictions (who isn’t?), then 2023 may be the perfect time for a Birmingham property investment.

Not convinced? Keep reading this ultimate Birmingham property investors guide to find out why you should invest in Birmingham today.

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property-investment-blog

Is Birmingham A Good Place To Invest In Property?

You might be wondering:

Is Birmingham a good place to invest in property?

While all the stats show Birmingham ranks well among the UK’s best rental markets, it’s important to consider what’s driving the market.

And the most significant driver is Birmingham’s need for new homes.

With a rapidly rising population resulting from regeneration, job opportunities, and good quality of living, the Birmingham housing supply cannot keep up with demand.

Rightmove found that rental enquiries increased by 51% between Q4 2020 and Q1 2021.

Demand is so high that research from JLL found that Birmingham needs 4,000 new homes per year for the next decade to keep up with demand.

This is the highest in the UK and surpasses Manchester, Liverpool, and Leeds.

Only 900 homes have been delivered each year since 2010, meaning that demand will more than likely continue to outweigh supply – a good sign for investors as this will mean house prices and rental values will continue to soar.

Birmingham Property Investment In Numbers:

01

1.1m

Birmingham is classed as the UK’s second city, with a massive population of 1.1 million.

02

40%

An incredible 40% of Birmingham’s population are aged under 25 – a key age for renting.

03

100,000

Birmingham has one of Europe’s biggest student populations, with over 100k students in 2023.

04

£778m

Over £778m is expected to be invested in the city from the Birmingham Commonwealth Games 2023.

05

£213,158

The West Midlands city offers average property prices from just £213,518 – £60k below the UK average.

06

144.5%

Birmingham property prices are affordable, with London property over 144.5% more expensive.

Birmingham: The UK’s Second City

Home to over 1.1 million people (2.6 million in the wider metropolitan area), Birmingham is the UK’s second-largest city.

And this already large population is continuing to grow.

According to the ONS, Birmingham’s population increased by 163% between 2002 and 2015.

Current estimations suggest that an extra 200,000 people will live in the city by 2038.

This is good reading for anyone considering property investment in Birmingham, with a rising population typically leading to rising housing prices and rental values.

Excitingly, 40% of this population are under 25 – a key age group for renting.

But it’s not only the population size that makes Birmingham the UK’s second city.

Thanks to its ideal prime central UK location, Birmingham acts as the UK’s logistical centre and boasts an economy worth over £24 billion – a figure likely to increase with further investment on the way.

Property Investment Guide 2023

Birmingham Property Market 2023

Birmingham’s property market has cemented itself as one of Europe’s stand out locations over the last decade.

This is because Birmingham property investment has the three main attributes needed to deliver an attractive investment for UK property investors:

  1. Affordability
  2. High Returns
  3. Strong forecasts for the future

According to official Land Registry data, average property prices for Birmingham property investments are just £213,158.

To put that into context, this is £61,554 below the UK average and a whopping £307,988 less than London.

(Although, it’s worth mentioning that Birmingham property prices are higher than other popular investment areas like Manchester, Liverpool, Nottingham, Newcastle, and Sheffield).

Thanks to these below-average prices, the return potential in Birmingham is high.

The city of Birmingham currently boasts average rental values of £1,417 per month, generating average rental yields of 7.98%.

This is a very high average but falls short of some other popular UK cities, as you can see in the table below:

City Average House Price Average Rental Yield
Nottingham £173,032 9.27%
Leeds £221,412 8.77%
Manchester £211,873 8.12%
Birmingham £213,518 7.98%
Newcastle £182,694 7.84%
Liverpool £164,867 7.36%
London £521,146 6.34%
Sheffield £197,135 5.50%

Factoring in capital growth (the increase in a property’s value) of 7.66% over the last 12 months and it’s clear there’s plenty of money to be made in the Birmingham region.

First Time Buyer?

Looking to buy property in Birmingham? View our first time buyers guide and get your free checklist today.

Where to Make the Best Property Investment in Birmingham? 

If you’re a property investor, it can be hard to decide on the best place to invest your hard-earned cash.

After all, not every UK property investment is made equal, with huge regional variations in house prices and rental income.

This is also true for Birmingham, with different Birmingham areas offering better return potential and rental demand than others.

Below you’ll find a breakdown of the places you should consider making the best property investment in Birmingham possible:

Birmingham City Centre 

Average House Price in Birmingham City Centre: £248,990

Average Rental yield: 5.36% 

The heart of every city, Birmingham’s city centre is likely the best place to invest for targeting young professionals.

Although average house prices are more expensive than the city average, and rental yields are only 5.36%, Birmingham city centre is offering strong return potential in 2023.

This is thanks to high rental demand and a wealth of ongoing regeneration.

Digbeth 

Average House Price in Digbeth: £231,702

Average Rental yield: 5.81% 

Named by the Sunday Times as one of the UK’s coolest places to live, Digbeth is found in the east of Birmingham and is only five minutes from the city centre.

Digbeth has become a hub for creative industries, with the likes of the Custard Factory housing several best-in-class digital businesses.

Due to this, the area is a hit amongst young professionals with plenty of modern apartments to choose from.

Jewellery Quarter 

Average House Price in Jewellery Quarter: £247,282

Average Rental yield: 5.36% 

Nestled neatly in Birmingham city centre, this bustling residential and commercial hub leaves a lot to love for investors.

The Jewellery Quarter accounts for over 40% of UK jewellery output and features over 150 retailers.

But this exciting regeneration hub is more than just a place to work.

With a booming nightlife and restaurant scene, plus a varied housing market featuring apartments, conversions, and townhouses, investors will find huge potential in this Birmingham property investment area.

It even has its own train station — the Jewellery Quarter station — making it a hit amongst young professional commuters.

Edgbaston 

Average House Price in Edgbaston: £323,763

Average Rental yield: 4.64% 

One of Birmingham’s most affluent areas, Edgbaston is a haven for families thanks to open green spaces and several key amenities.

Not only is Edgbaston home to the Warwickshire County Cricket Club, Midlands Art Centre, and Victorian Botanical Gardens, but it also features several Michelin-starred restaurants and the Victorian Campus of Birmingham University.

Harborne

Average House Price in Harborne: £352,037

Average Rental Yield: 3.96% 

Harborne is one of the most desired living spaces in Birmingham.

A hotbed for affluent families and professionals, Harborne benefits from fantastic transport links that provide easy access to the city centre.

A whopping 63% of Harborne residents are employed at a managerial or executive level, creating the potential for huge returns for investors who can afford the premium entry fee.

Solihull 

Average House Price in Harborne: £323,496

Average Rental Yield: 4.82% 

Although technically not in Birmingham, this nearby affluent borough is well-worth considering if you’re looking for rental properties in the West Midlands.

A 30-minute drive from Birmingham, Solihull continues to grow and expand thanks to many regeneration initiatives.

This includes a huge 20-year master plan for Solihull town centre, as well as an upcoming HS2 interchange.

Looking to learn more about Birmingham? Click the following link which takes you through to the Birmingham property guide.

Birmingham vs London: The UK’s Second City

For many investors, London is seen as the pinnacle of property.

With a booming market suited for commercial, residential, and student property investors, you’d be forgiven to think that London is a better choice than Birmingham.

And yes, while London is a fantastic investment choice (provided you’ve got the cash), dig a little below the surface, and you’ll find that the UK’s second city and London are a lot closer than you may think.

Firstly, Birmingham is far more affordable than London, with London prices nearly two and a half times Birmingham’s average property prices.

Rental yields are also superior in Birmingham despite London’s higher rental income, with Birmingham yields 1.64% higher than the capital’s.

However, what London lacks in rental yields, it makes up for in capital growth.

Over the last year, London prices have increased by a whopping £26,953, while Birmingham is over £10k less.

So, what’s the bottom line?

For those looking for a more affordable investment with strong capital growth and rental yield potential, then Birmingham is a top alternative to London.

However, if you have the cash and want a rapidly appreciating asset, then a London property investment could be the best choice for you.

Why Invest in Birmingham?

A major reason behind the success potential of property investment in Birmingham is the massive regeneration ongoing in the city.

Over the last two decades, the city’s housing market has been completely transformed with new homes, jobs, and amenities on offer.

Some of the most expansive (and expensive) urban regeneration projects in Birmingham are:

This £1.5bn development will introduce 1,000 new homes and 3,000 new jobs across a 14-hectare site.

Likely Birmingham’s biggest project, the Big City Plan will create 50,000 new jobs and an estimated £2.1 billion a year for the Birmingham economy.

This brand-new transport expansion is set to overhaul travel in and out of Birmingham by serving over 80 tram stops and 20 transport interchanges.

Centred around the new Curzon Street Station, HS2 will create 36,000 new jobs, 4,000 homes, and 600,000 square metres of commercial space in Birmingham.

An exciting £700m Birmingham city centre project will add 1.8 billion square feet of office, leisure, and retail space.

Found near Paradise, this expansive development is now the home of HSBC’s main headquarters.

Invest in Birmingham for World-Class Infrastructure and Amenities 

Infrastructure and available amenities are two integral parts of property investment.

Why?

Well, infrastructure provides easier access to job opportunities and significantly increases an area’s quality of life and attractiveness.

Birmingham has some fantastic transport links, with a city-wide tram system, expansive motorway routes, and the upcoming HS2 line at Birmingham Curzon Street Station.

Even better:

The city has an airport, with Birmingham Airport (formerly Birmingham International Airport) just a short journey from the city centre.

Birmingham property investment also has a lot to offer its residents when it comes to amenities.

With the likes of the Bullring shopping centre, Utilita Arena Birmingham, and a plethora of world-class restaurants and retail spots, living in this bustling West Midlands city has quickly become the preferred choice of many young professionals.

View our first time buyers property guide in Birmingham.

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