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Birmingham Property Investment

Why Invest in Birmingham?

Birmingham is the largest and most populous British city outside London with 1,123,330 residents (ONS, 2014) and its metropolitan area is the UK’s second most populous with over 3,700,000 residents. Welcoming and dynamic, it is one of the UK's most popular cities attracting thousands of people each year to live, work and play and this number is only set to increase.

Vast amounts of development is currently underway or in the pipeline, with the brand-new high speed train, the HS2, set to attract a wealth of new investment in to the city.

With around 4.3 million people of working age within an hour’s drive of the city (creating one of the largest catchment pools in the UK) the city has climbed 14 places up the rankings of the top European cities for property investment, according to an annual report published by the Urban Land Institute and PwC. (This is Money, Jan 2015)

Location and Accessibility

Air, road and rail transport links grant access from Birmingham to the rest of the UK and world quite easily.

The M40 motorway connects to London via Oxford. The M6 motorway also connects Birmingham to London (via the M1) and the south, and the North West of England and Scotland.

From Birmingham you can be in London in just over 2 hours and by rail you can be in Manchester in 1 ½ hours. This means you have access to over 90% of the UK within a 4-hour travel time, making its central location ideal for property investment. Birmingham’s main train station, New Street, was re-opened in November 2015 after a £750m transformation. The station, which is used by 170,000 passengers a day, is helping to boost the regeneration of the city centre as well as provide the millions of passengers who use it with a modern station. With the Grand Central shopping development now created above it, New Street represents a vital piece to the continued development of Birmingham and its surrounding areas.

A new dedicated high-speed railway station will be built at Curzon Street to accommodate the brand-new HS2 route from Birmingham to London, due for completion in 2026, which will see the journey time to the capital reduced to just 49 minutes.

Birmingham is served by Birmingham Airport, located to the east of the city, which is the seventh busiest by passenger traffic in the United Kingdom (CAA, 2014) and has flights to a large number of European destinations, as well as a number of long haul services to the USA, India, UAE and more. Flights to Beijing were launched in the summer of 2014 following the completion of the runway extension.

Economy and Future Developments

Birmingham’s economy has experienced buoyant growth over the past five years to become the UK’s leading financial and professional services centre outside of London, with a GVA of around £24 billion (ONS, December 2014).

The latest employment figures for 2014 show that there are nearly half a million people employed in the city, a workforce which grew by 10,500 in 2014, up 2.1% on 2013. Birmingham was the number one creator of private sector jobs amongst the core cities last year (Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham, Sheffield) accounting for nearly one in five (19.7%) of new private sector jobs created within the core cities in 2014.

The city of Birmingham is an important manufacturing and engineering centre. Manufacturing in the wider region is being re-energised by international investment in the car industry. Jaguar Land Rover has invested more than £2 billion over the past two years into its factories in Solihull, Coventry and Wolverhampton while Chinese company SAIC has pumped around £0.5 billion into its Birmingham operations.

The economy of Birmingham is forecast to grow by an average of 2.7% per annum over the 2014-2018 periods with a net increase of 146,000 jobs over the decade to 2024. (JLL)

By 2031 Birmingham’s population is projected to grow by 150,000 according to the Birmingham Plan 2031. This level of growth, based upon recent trends, is greater than has previously been considered and presents a significant challenge for planning the future homes and jobs the city needs.

There is a grand-plan in place in the Birmingham Plan 2031, which will develop the city with sustainable neighbourhoods, making provisions for the significant increase in the population. This will see a wealth of new investment into the city as there will be an increase in demand for new housing, jobs, infrastructure and services. On the basis of the projected increase in population, there is a need to plan for around 80,000 new homes from now till 2031.

University

Birmingham itself has five universities: Aston University, Birmingham City University, University of Birmingham, University College Birmingham and Newman University College.The city has a student population of about 65,000, and boasts more research students than any other city outside of London, and these future graduates will be very important in continuing to develop this economy.

Birmingham University ranks 17th in the Guardian’s University league tables of 2016 and the Warwick University, some 20 miles to the South East of the city is listed at number 80 in the Times World University Ranking.

Rental Market Summary

Over the past decade Birmingham has undergone a remarkable reinvention. In September 2015 a report by PwC and the Urban Land Institute says Birmingham is set to overtake London as the most attractive city for property investment over the next 12 months.

The B7 postcode (Nechell) ranked number 7 in the list of best performing buy-to-let postcodes in the UK, with yields reaching 8.20% (This Is Money, July 2015, source: LendInvest / Zoopla)

According to figures from Zoopla, property in Birmingham has risen in value by 8.27% in the past two years, with buyers who have been priced out of London looking to invest in the city. This has created an excellent environment for buy-to-let investors: the rising prices create great opportunities for capital growth, while still offering substantial high yields due to the high demand of rented property.

The city has also climbed to number 6 in the rankings of the top European cities for property investment, according to an annual report published by the Urban Land Institute and PwC, while London has moved down five places as some investors grow wary of paying such a high premium for investing in the capital. 

With a population of 1,123,330 , Birmingham is the second largest city in the UK after London.
The Land Registry states that house prices in Birmingham average at £162,369 compared to £186,553 for the average UK home (excluding London).
There are nearly half a million people employed in the city, a workforce which grew by 10,500 in 2014, up 2.1% on 2013
80,000 new homes are expected to be built across the city over the next 17 years.

(Updated November 2015)

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Risk Warning and Disclaimer:

The price of property can go down as well as up. Historic performance should not be taken as a guarantee of future performance. Geared property investment with mortgages can increase risk of losing money as well as increasing the possible gains. Mortgage products referred to in the website can be withdrawn by the lender or have rates or other terms changed without notice and reference to any products does not imply they are certain to be available in the future. Mortgages referred to may also have certain applicant restrictions and are for indicative purposes only although reasonable endeavours have been used to ensure that they are available at the time of publication and are applicable to a significant number of our purchasers. This site is for information purposes only and nothing on this site should be taken as definitive investment advice for your particular situation without you seeking additional guidance directly from ourselves or from other finance and property professionals. Property particulars on this site do not form part of an offer or contract. The developer and Assetz Property Ltd, whilst endeavouring to ensure complete accuracy in these property particulars, cannot accept liability for any errors. Valuations of property or indicated rents achievable are either estimated or derived from valuations and/or comparables and can change and should not be relied upon without your own additional valuation and research, but we have carried out reasonable endeavours to achieve accurate indications for these figures. All descriptions, dimensions, areas, reference to condition and, if necessary, permissions for use and occupation and their details, are given in good faith as provided by the developer and are believed to be correct. However, these are subject to change, especially, but not wholly, relating to any property that is off-plan or not yet complete. Any intending purchaser should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to their accuracy. The onus is on each individual investor to undertake their own due diligence, enquiries and inspections. Where shown, net yields are calculated as rental income less expected service charges less expected ground rent as a percentage of the property price. No void periods, optional letting agent costs, repairs or other costs are deducted. Our standard Terms and Conditions of Sale will apply. E. & O. E.