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Birmingham Property

Why you should invest in Birmingham property for your retirement

For the retirement lifestyle, you deserve and desire, have a strategy and a location

With low-interest rates, volatile financial markets, and a global economy that appears to be stagnating, many people will rightly be concerned about their retirement years. Just how much money do you need to retire comfortably, and how can you save enough?

Property has proven to be the best long-term investment. It is more stable than share markets, usually benefits when interest rates are low, and is the most responsive asset to supply and demand I know. After all, shelter is a basic human need.

As the population grows, more people need homes. This is why, even when the economy tanks, property prices usually hold up much better than share prices, the value of art collections, gold and silver prices, and so on.

In this article, you’ll learn why property could be the perfect investment asset to build a comfortable retirement.

How much money will you need in retirement?

Most financial advisors agree that you’ll need around two-thirds of your final salary per year before you retire to pay for your spending in retirement. So, if your final salary before you retire is £45,000, you’ll need £30,000 per year to retire.

Calculating what you need to produce this can be done in one of two ways:

  1. The first is to guess how many more years you may live and multiply by £30,000. For example, if you think you’ll live for 30 years, you’ll need £900,000 in your pension pot.
  2. The second is to figure on a 5% withdrawal from your fund each year. If your fund makes 5% every year and you withdraw the return every year, your fund will remain intact and it won’t matter how long you live. In this case, to retire on £30,000, you’ll need to have a fund of £600,000.

So, you need to save enough to create a fund of between £600,000 and £900,000 to retire with an income of £30,000. However, there is one small problem:

Inflation and investment returns in retirement will affect your spending power. If inflation rises, you’ll need to take more out of your fund. If your investment returns don’t keep pace with this, your money won’t last as long as you plan, unless you reduce your standard of living as you get older.

How does property investment help in retirement?

When considering property investment or pensions savings, there is a lot to consider. One of the main ones should be how to sustain your lifestyle throughout your retirement. For this, buy-to-let property can be fantastic. As prices rise, your tenants expect their rents to rise. It’s a natural inflation-proofing. In addition, the property remains yours and could increase in value. In the UK, property prices have doubled every seven to 10 years on average for the last 100 years (though, of course, the past is no guarantee of the future).

Property doesn’t tend to crash by 30%, 40% or 50% like shares do every 10 years or so. That’s because of the constant (and growing) demand for new homes.

So, property is a great investment for retirement purposes – provided you buy the best property you can in the best location. For example, if you buy in an area that is dominated by a single employer, should that employer go bust or move, the demand from tenants for your property is likely to crash.

Why Birmingham is the ideal location for property investment for retirement planning

Birmingham, the UK’s second city, is one of the most attractive locations for long-term property investment in the UK. Here are just a few reasons why:

  • Investors are benefitting from massive regeneration across Birmingham.
  • The local government has a highly ambitious and detailed Big City Plan that looks forward to the next two decades – with years of stunning economic growth mapped out to add more than 50,000 jobs in the city.
  • HS2 is on its way here, and this will reduce travel times to London to less than 50 minutes. This will improve connectivity in an already well-connected city – could Birmingham become a commuter town?
  • It is the host city for the 2022 Commonwealth Games.
  • Birmingham has a thriving and diverse local economy, with new business numbers growing at three times the UK average rate.

Demand for property is high here, and with the population forecast to grow by 12% by 2032, this demand will only increase. It is a young population, too, with more than 40% under the age of 25 – ideal targets for the buy-to-let market.

Over the last three years, property prices in Birmingham have been rising by between 5% and 10% each year, and further growth is forecast. Knight Frank expects the average price to rise by 14% between now and into 2020. Hometrack forecasts price growth of between 20% and 30% in the next four years.

In summary

If you want a comfortable retirement, one in which you have the income to do what you want to do and live the lifestyle you desire, you should consider property investment. And you don’t need to be a property mogul with a portfolio of hundreds of properties to create the income you need.

What you do need is a strategy to develop a portfolio of three properties (yes, you did read that right – three), and to buy those properties in a location that will support and sustain long-term investment.

The location is Birmingham. The strategy is called The 3+1 Plan. To find out more and receive an in-depth appraisal of the best property investment opportunities in Birmingham, get in touch with Gladfish today.

Live with passion

Brett Alegre-Wood

Birmingham Property

Birmingham – where big businesses and SMEs are driving property investment opportunity

Economic energy is energising property investment opportunity in Birmingham

When investing in property, one factor that is fundamental to success is its local economy. Professional property investors know that the strength, depth and breadth of an area’s economy is a powerful determinant to the strength of its property market. More jobs attract more people into an area, and that increases demand for housing. When we conduct our research and due diligence in our search for the best places to invest in property UK, local economic factors are high on our list.

Its local economy is one of the reasons we love Birmingham. And we’re not the only ones – big businesses, SMEs and start-ups love Birmingham, too.

Global businesses love Birmingham

Global businesses are choosing Birmingham for many reasons, including its young, well-educated population and a local authority ‘Big City Plan’ that puts economic growth at the heart of its long-term strategy (and creating more than 50,000 new city centre jobs over the next 20 years).

Big companies including HSBC, Deutsche Bank and PwC have located or relocated here, bringing thousands of jobs into the city. They are unlikely to be the last. Increasingly, companies based in London are casting their eyes over to the UK’s second city. The exodus of companies from London may gather pace the nearer we come to HS2 services running (with the journey time between the two cities slashed to less than 50 minutes). The advance in technology and online speed is also a factor in making regional cities like Birmingham more attractive than London, where costs are much higher.

Birmingham’s central location, linked to the rest of the UK by an extensive road and rail network and to the rest of the world via Birmingham Airport, is a further attraction for big businesses that have extensive branch networks, or that supply goods across the UK.

Small businesses flourish in Birmingham

It may not surprise you to learn that London is the UK’s number one city for business start-ups. It is, after all, the UK’s largest city. It may not surprise you that Birmingham is second to London in the number of companies starting. What may surprise you is that Birmingham is the UK’s most entrepreneurial city, with a far higher start-up to population ratio than any other UK city in 2017, including London.

This level of growth in start-ups is likely to be a very important factor in Birmingham’s economic growth in the future. Big businesses may grab all the headlines – creating 1,000 new jobs or more in one hit is big news, after all – but SMEs are the driver of new jobs in the UK. According to a repost from Santander, published in November 2018, SMEs create three times the number of new jobs created by big businesses. Their research showed that between 2013 and 2017:

  • Big businesses added 650,000 jobs to the UK economy
  • SMEs (companies employing fewer than 250 people) added 1.7 million

Managing director of Santander Business commented, “While there are many great roles available working for large companies across the UK, SMEs remain the life blood of the UK economy.

The reasons Birmingham is so entrepreneurial and attracts so many SMEs and start-ups mirror the reasons why big businesses love the city: great transport links, a supportive local authority, access to a large, well-educated and young workforce, and investment in infrastructure.

Big and small businesses provide the energy behind investment potential

For big businesses, the pull of Birmingham is difficult to dispute. It’s more affordable than London, has fantastic facilities, and offers residents an amazing lifestyle – the shopping and leisure options in Birmingham here are incredible.

It is the host of the 2022 Commonwealth Games – won at least in part because of its strength of infrastructure and transport connections, and its appeal as a modern city.

The population is young and diverse, well-educated and entrepreneurial – an ideal demographic to support the UK’s largest business, financial and professional services sector outside of London. With HS2 approaching, it is possible that Birmingham could become London’s next commuter town, too.

It’s time to invest in Birmingham property

There is a real feeling of positivity around Birmingham. Inward investment is flowing, and new business start-ups are flourishing. The strength and diversity of Birmingham’s local economy is just one of the eight reasons investors are snapping up Birmingham property, but it is extremely compelling. The opportunity to benefit from a strong and growing economy, and the young professionals who will be looking for rental property, is one that property investors should not miss.

To find out more and receive an in-depth appraisal of the best property investment opportunities in Birmingham, get in touch with Gladfish today.

Live with passion

Brett Alegre-Wood

Birmingham Property

How can you profit from property investment in Birmingham?

4 steps to take advantage of Birmingham’s potential

Birmingham is a city with huge appeal to its residents. It offers some amazing shopping, great restaurants and bars, and a fantastic nightlife. It’s a city with a rapidly growing and young population, and five universities supporting the education of 65,000 students. With a diverse and growing economy, home to many national and international businesses, and boasting one of the fastest rates of new business start-ups in the UK, the number and quality of jobs available here is encouraging many more people to make Birmingham their home. In 2017, more people migrated out of London to Birmingham than to any other UK city.

A city is a place where savvy investors are buying property, with regeneration pumping Birmingham property prices. If you are considering investing in property in Birmingham, we think you are about to make a good decision. But how good that decision will be depends on investing wisely. These four steps will help you take advantage of the very real potential for property investment in Birmingham.

1.    Do your research to pick the best location

Most locations in Birmingham are in high demand. However, we think four city centre locations are standout areas. These locations allow investors to take advantage of the growth in the population of young professionals who want to live on the doorstep of all Birmingham’s fantastic amenities. They are:

  • Digbeth, a trendy location with great transport connections and some exciting regeneration going on. Here you’ll find an eclectic mix of bars, bistros and cafés. Young professionals are attracted by the modern contemporary apartment-style living being developed here.
  • Southgate & Highgate is home to the Chinese Quarter and Birmingham Gay Village. It’s a vibrant and diverse area of the city undergoing massive redevelopment of its wholesale market. Here, vacant land and derelict buildings are being transformed with open spaces and a fantastic residential offering which is ideal for young professionals and families.
  • The Jewellery Quarter is a well-connected and vibrant place to live, work and play. It is packed with character as a result of its more than 200 listed buildings, and could be described as the cultural heart of Birmingham; here is where you will find museums and galleries as well as some amazing eating and drinking options. Only a few minutes’ walk from the best of Birmingham, the Jewellery Quarter is uber trendy and offers younger residents a relaxed or lively nightlife, whichever the preference. Property investors here benefit from a good rental yield and affordable entry level.
  • Westwood and Ladywood is an area supporting more than 200,000 jobs. 130,000 people live here. This really is one of the most popular areas of Birmingham. It is where you will find The Cube and Brindleyplace, and the International Convention Centre. There is huge potential here, with more regeneration to come.

2.    Run your numbers

Always project your cash flow before investing in property. Take a deeper look at the locations in Birmingham in which you are considering an investment, and do your research to find out actual rents that are being achieved in the location. Speak to letting agents and ask about average void periods and length of tenancy. If all the numbers stack up, then move to the next step.

3.    Consider future value

Like most other cities in the UK, Birmingham is short of property. Demand for homes outstrips supply, and unless and until this equation balances out, the pressure on prices will be up. Another consideration is that when High-Speed Rail services start operating, London will be less than 50 minutes away. Birmingham may become a commuter town!

Hometrack has forecast that property prices in Birmingham are likely to rise between 20% and 30% in the next three years. That’s some real growth potential.

4.    Should you buy off-plan property in Birmingham?

When you buy off-plan property, you should be able to negotiate a discount to the current market price (we do this for our investors, and because we negotiate in bulk, we tend to get the best discounts). You’ll be able to pay down a lower initial deposit, and stage payments as the build progress. By the time the property is completed in, let’s say, two or three years, you could be sitting on a property that is worth 20% to 30% more than you paid (perhaps even more) if Hometrack’s assessment and forecast prove to be correct.

How do you buy off-plan property in Birmingham?

If you have never invested in off-plan property previously, it can be a daunting prospect. We’ve helped hundreds of beginner investors take those first steps, ensuring that they pass the sleep test – which says don’t do anything that makes you sleep poorly.

If you’re considering investing in off-plan property in Birmingham but aren’t sure if it’s for you, download your free copy of our eBook ‘Profiting from Off-Plan Apartments’. This is the definitive guide for property investors buying off-plan apartments and will help you to maximise your profits while minimising risks.

Otherwise, to find out more and receive an in-depth appraisal of the best property investment opportunities in Birmingham, get in touch with Gladfish today.

Live with passion

Brett Alegre-Wood

Birmingham Property Investment

6 Reasons you should buy investment property in Birmingham

A thriving economy, young population, and lack of supply, plus more

Birmingham is a firm favourite with property investors, and our research confirms it is one of the best places to invest in property UK. It benefits from fantastic and improving infrastructure (including High-Speed Rail on its way), demand for homes that is outstripping supply, and according to PwC and Demos is the fastest-improving city for quality of life in the UK. Here are six more reasons you should buy investment property in Birmingham. Read More
Birmingham Property Investment

The regeneration that is pumping Birmingham property prices

Should you follow the billions of pounds being invested in Birmingham’s remodelling?

With the population expected to grow by more than 15% in the next two decades and the local economy booming, serious property investors are buying in Birmingham for its potential to produce above-average rental yield and capital growth. Investors here are also benefitting from the billions being invested in the regeneration of Birmingham, with infrastructure, commercial, retail and residential all benefitting. Here’s a taste of this massive investment. Read More

8 reasons investors are snapping up Birmingham property

Why Birmingham is top of the list of best places to invest in property UK

When you’re researching locations to find the best places to invest in property UK, you really want to find an area where all the property fundamentals are strongest. You’ll be looking at factors such as shops, schools, transport links, major employers and major investment. You’ll want to have evidence that where you are investing has a promising future, backed by a strong local economy and a growing population. Read More