Birmingham property investment

Birmingham is widely regarded as the UK’s second city. However, is that a reason you should consider investing in property in Birmingham? In this report we will look at some factors you should bear in mind when considering investing in property in Birmingham.

1. Birmingham is the most highly populated English district outside London, with a population of 1.1m. It comprises part of the second most populated urban area in the country (together with the cities of Coventry and Wolverhampton and the boroughs of Dudley, Sandwell, Solihull and Walsall) to give a total area population of 2.7m.

2. The population is growing, and continues to grow. After growing faster than any other UK city in the last decade the ONS forecasts Birmingham’s population will increase by 15% or 150,000 by 2031.

3. The jobs market is forecast to expand significantly. A report from Capital Economics suggests the jobs market here will grow by 10% in the next five years, with 47,000 additional jobs being created in Birmingham.

4. Birmingham has been named as the best place for businesses to invest in Europe, second only to Barcelona, by US investment location experts Site Selection. Site Selection’s ‘Best to Invest’ list focuses on factors including growth in new facilities, capital investment, economic strength and infrastructure. London was ranked in fifth place according to the same criteria.

5. The city centre has undergone extensive regeneration in recent years and more ambitious schemes are underway. The local authority’s Big City Plan is designed to co-ordinate expansion of the city centre core area and forecasts £10bn of investment could be attracted bringing 50,000 new jobs and 5,000 additional city centre homes.

6. Birmingham city centre is the largest city centre Enterprise Zone in the UK. Projections suggest it could create 40,000 new private sector jobs, primarily in business and financial services, and contribute £2.8bn to the city’s economy.

7. The city centre is second only to London’s West End in terms of visitor footfall. The rebuilt Bullring shopping centre is one of Europe’s largest city centre shopping centres. From autumn 2015 the new Grand Central Birmingham shopping complex above the redeveloped New Street railway station joins the extensive retail offering.

8. The city is a major student centre with 65,000 students at five major universities. Total student numbers are higher than any UK city outside London leading to high demand for student accommodation.

9. Birmingham is not only located close to the physical centre of England but is at the centre of the UK’s transport network. As well as being at the centre of the national motorway network, north-south-east-west rail lines all interchange in Birmingham city centre.

10. The city stands to gain perhaps more than any other in the UK from the development of the HS2 high speed rail network. The city will have fast direct links to the country’s two other largest cities from both the city centre and the airport – London (49 minutes, and could be running by 2026) and Manchester (41 minutes, by 2030-3).

The new city centre HS2 station will see 141 hectares of the city centre redeveloped into what will be one of the biggest urban regeneration schemes ever seen in the UK.

11. In common with other parts of the UK, Birmingham has a significant housing shortage – a situation which tends to support rental values and further property price appreciation. Official estimates say there is a need for 80,000 new homes across the whole area, although only a few thousand a year are currently being built. Birmingham City Council has so far only found space for 43,000 of the new homes that are needed in the city itself.

12. Birmingham, as well as the wider West Midlands area, has property prices that are still significantly below the national UK average. Latest figures from the Land Registry record that the average property price in Birmingham is around £177,000 compared to the national average of £243,000.

All the cities and boroughs of the West Midlands, except for Solihull, have property prices significantly under the national average.

13. Birmingham ranked sixth as a real estate investment location in PwC’s 2015 ‘Emerging Trends In Real Estate Europe’ report. London was ranked tenth. The report pointed towards lower property prices, less competition and better yields as a reason investors are looking to invest in regional UK cities such as Birmingham.

If you are interested in investing in regional cities you might find these Insider reports interesting:

12 Things Property Investors Should Know About Leeds

16 Good Reasons To Invest In Manchester