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posted on 26 Jul 2021 by FleetMilne

Why Invest In Birmingham Property In 2021

Blog | Property | Why Invest In Birmingham Property In 2021

Since we’re based in the city, we may be a little bit biased when it comes to what Birmingham has to offer for investors and buyers. However, there is no denying the fact that the UK’s second city is fast becoming the go-to place for buy-to-let investment in Europe. When you look at the regeneration that is currently happening in Birmingham, it’s easy to see why.

Take a look across the city’s fantastic skyline and your view is filled with cranes and construction projects. Walk its energetic streets and the words ‘Coming to Birmingham Soon’ are the focal point of every billboard. It makes you question – what’s happening to this wonderful city that we call home? But you soon realise and the answer becomes clear. 

The future is bright for Birmingham. A city that has lived in the shadows of London for many decades, Birmingham is finally enjoying a long-overdue renaissance moment. With every new development that lands in the city, the gap between the UK’s two largest cities narrows, and that’s undoubtedly the main reason why investment interest is building in the city. 

But what are the other reasons? In this blog, we will detail the key factors why now is the time to invest in Birmingham’s already booming property market, and why you should get in earlier rather than later.

A Bright Future

As previously mentioned, Birmingham is currently enjoying a wide-scale regeneration. Areas such as Digbeth and the Gun Quarter, which were once known as industrial neighbourhoods, are now blossoming into bohemian, developing districts. 

The Big City Plan, which was first started in 2003, is a dedicated regeneration scheme that sets out to expand the city’s core by 25%, create 50,000 new jobs and bring £2 billion to the local economy each year. To date, its impact on the city has been phenomenal, and it shows no signs of stopping.

In recent years, many major developments, including Birmingham Grand Central, Paradise and Smithfield, have added to Birmingham’s appeal, and the price of housing has risen as a result. For investors looking to place their money in Birmingham property, the cranes and construction that we referenced earlier in this blog should not be seen as an eye-sore, but an image of opportunity. 

Additionally, with major events like the Birmingham 2022 Commonwealth Games on the horizon, the city is poised to take its place on the global investment stage. In recent years, foreign direct investment into the city has increased dramatically, and we have experienced this first-hand at FleetMilne.

Business Is Booming

With a wealth of around £30 billion, Birmingham has the strongest local economy outside of the capital. Thanks to the aforementioned Big City Plan, this is set to grow significantly with over £10 billion of planned regional investment landing in the Second City over the next few years. 

Plus, a variety of internationally recognised businesses and organisations, including HSBC, PwC and Deutsche Bank, have relocated their headquarters to Birmingham, and many others look to be following in their footsteps.  

With its growing population and connections to London, Birmingham is an attractive location for a diverse range of employers – from start-ups to conglomerates. Commercial activity is on the rise in the city and the career opportunities are endless. Over the last few years, the number of businesses within the city has increased by 15%, which is three times the UK average. 

Birmingham is now considered to be one of the UK’s leading financial and business hubs outside of London, which goes a long way in attracting working professionals and boosting the city’s demand for tenants. 

In recent years, some of the UK’s top housing developers, such as Berkeley Homes, have recognised the growth that is taking place within Birmingham, and new residential plots are appearing all over the city.

Life Is Good

Birmingham is an incredibly diverse city, with a rich cultural heritage. Home to a population of just over a million people, it’s recently been voted as one of the best places to live in the UK. That may explain why 40% of the city’s residents are under 25 years of age, making it the youngest city in Europe. 

From top restaurants to home-grown independents, the city has something on offer for everybody. Enter the city core and you’ll be met with a bustling, vibrant city that is littered with picturesque streets and canals. Take a short walk out to the iconic Jewellery Quarter and you’ll enjoy boutique stores, as well as artisan eateries and tranquil green spaces. Like London, it truly is a city that caters for all and allows you to live life at your own pace.

Birmingham vs. London

Although London has long been the top choice for both UK-based and overseas investors, Birmingham is set to knock the capital off its perch. Why? Due to the inflated housing prices in London, which are now three times higher than in Birmingham, the Second City can provide buyers with a much better return on their investment. 

Over the last few years, London has undergone somewhat of a recovery phase and it’s rental yields now hover around the 3.7% mark. On the other hand, whilst the capital patched up its wounds, Birmingham property prices soared and rental yields are now set at an impressive 5.1%.

With the introduction of HS2, which will provide a high-speed rail link between the two cities, rental yields are only going to improve, as Birmingham will instantly evolve into a hotspot for London workers. 

Away from the capital, Birmingham also stacks up nicely when compared to the UK’s more affordable cities. As it stands, Birmingham’s rental yields are on par with the likes of Manchester and Liverpool, but for the reasons discussed in this blog, the Second City is on track to eclipse its northern counterparts in the coming years.

Get in Touch

Are you looking to invest in the Birmingham property market? Good decision! To learn more about buy-to-let opportunities within the city, get in touch with our team or fill in our short investment enquiry form here.

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