Could property prices boom in Birmingham?
When it comes to the topics of daily conversation in the UK, weather and property prices are probably the two most talked about. Boy, do we love discussing the rain and house price inflation. But sometimes people get carried away by the big picture and miss the detail. And it’s the detail that is the real story.
Take Birmingham property investment as an example. In April 2016, while most market observers were focused on the big picture of the upcoming EU Referendum and how it might ‘crush’ UK property prices, our research team were already getting excited about the property investment opportunities in Birmingham. We were telling property investors to buy in Birmingham, highlighting that it was the best place in the UK for businesses to invest.
Finally, nearly 18 months later, others are catching on about Birmingham’s exceptional potential for property investment. In this article, you’ll learn what others are now forecasting about property investment potential in Birmingham and that Gladfish has been saying for ages.
Property developers get turned on by Birmingham
At the LendInvest Property Development Academy held in Birmingham, there was a real buzz about the city’s prospects. Of course, the Emerging Trends in Real Estate 2016 report by PwC and the Urban Land Institute had named Birmingham as the UK’s best performing city, calling all the property fundamentals as reasons for the positivity.
LendInvest has recognised that Birmingham is an excellent city for investment. It’s young, vibrant, and dynamic. Its universities are among the best in Europe and provide a flood of undergraduate and graduate tenants. Businesses have already woken up to the opportunity this offers them: a diverse and well-educated workforce at highly competitive costs. And big companies are moving here.
Already, HSBC and Deutsche Bank have relocated their core functions to the city. Tech and media firms are taking up residence, too. Indeed, with The Start-Up Loans Company naming Birmingham as the most entrepreneurial UK city outside London, start-ups show the potential for Birmingham property investment.
Birmingham is a fascinating place to be right now. With the massive investment in infrastructure and regeneration that is taking place here, it is incredibly different to the Birmingham of 10 years ago. In another 10 years, it will be almost unrecognisable.
For example, with the arrival of HS2, Birmingham will be within 50 minutes of London by train. That’s a shorter time than many commuters into London currently travel. It is possible that London workers will relocate from the capital to Birmingham, where homes are more affordable, and you get more property for your money.
LendInvest also points to Birmingham’s vibrant rental sector. It’s most recent Buy-To-Let Index found that Birmingham’s current rental yield is 5.02%. When coupled with the capital growth of 6.13% over the last year, property investors in Birmingham have seen some of the UK’s best gross returns over the last 12 months. (It’s time for us to say, “We told you so!”)
While LendInvest says that Brexit remains an unknown, it concludes that Birmingham has room for growth compared to other cities in the UK and that it is a “city in a region that people want to live in, and looks set to thrive in the coming years”. (source: Bridging & Commercial)
Birmingham is now on the list of Northern Powerhouse property hotspots
As reported by whatinvestment.co.uk, IP Global has added Birmingham to Manchester and Liverpool as a northern property hotspot.
IP points out in its latest Global Real Estate Outlook report that Birmingham property prices are still below their 2008 peak, and this is one reason that makes the city an “attractive option for new investors seeking entry into the UK property market”.
Regional cities like Birmingham enable the investor to diversify out of London. With significant infrastructure and regeneration investment planned and in place, including the 20-year Big City Plan, Birmingham is well placed for continued positive results from property investment.
According to IP’s research, buy-to-let investors here have seen rental yield grow by 24% in the past 12 months, with the city centre yield now at 4.25%. Year-on-year, house prices in Birmingham advanced by 5.3% between 2015 and 2016.
Hamish Pound, an Investment Manager at IP Global, said, “With its proximity to London, as well as other key regional hubs, Birmingham is ideally placed to assume the position as a leading destination for both domestic and overseas investors.”
Birmingham is in the top 20 of European cities for employers and staff
Rounding off the three key reports recently released about Birmingham’s status and potential for property investment returns, Colliers International places it firmly in the top 20 of its league table of 50 European cities for employers and employees. Colliers’ research looked at a host of factors, including talent, location, quality of life, and cost of living.
Should you invest in property in Birmingham?
We believe the answer is yes. Mind you, we’ve been highlighting Birmingham’s potential for property investors for quite some time now. It’s great to see that others are catching up.
Birmingham is a great place for business, a great place to work, and a great place to live and study. It’s no surprise to us that the city is now ranking so highly with other property market experts.
Investors in off-plan property in Birmingham could be handsomely rewarded with substantial capital gains and income-enhancing rental income upon completion. To discover the best investment opportunities in this growing city, contact one of the Gladfish team today on +44 207 923 6100.
Live with passion,
Brett Alegre-Wood
