Investing in Birmingham property

March 14, 2023

With recent developments and regeneration schemes, demand has been strong across the Birmingham property market. But what does this mean for investment prospects moving forward?

Having established itself as the UK’s second city, Birmingham has undergone extensive growth in recent years. What’s been behind this and what’s expected to happen over the long-term in this city’s housing market?

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Significant development and regeneration

Over the past decade, there has been significant regeneration across Birmingham, boosting house prices, liveability, and housing demand. The city’s ever-changing skyline continues to reach new heights, particularly as demand for city living thrives.

In the past year, there was further construction growth. In 2022, new starts in the industry were mainly driven by the residential and office sectors, according to Deloitte’s Birmingham Crane Survey 2023.

There were 43 schemes under construction compared to 34 in 2021. That’s an increase of around 30% and illustrates three years of consecutive growth. These findings show that investors and developers remain confident in Birmingham and its future.

Additionally, off the back of successfully hosting the Commonwealth Games last year, this put the city on a global stage. And the legacy of the Games will be the city’s continued ability to attract investment and build on its global reputation.

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Supply and demand imbalance

Last year saw a record-breaking number of residential units being delivered in Birmingham. In 2022, nearly 2,400 homes were delivered. This is up 58% from the previous year and surpassed the previous record of 2,072 homes delivered in 2020.

Looking forward, the residential pipeline is remaining strong. Birmingham’s industrial heritage also provides a unique selling point for residential schemes. And demand from investors, buyers and tenants alike has continued to increase.

Some might believe Birmingham has become overcooked in terms of development, but there are still great investment opportunities across the city. Even though supply has increased, particularly in recent years, demand is still outweighing the current supply of housing stock.

Birmingham’s population has been on the rise, having increased by 6.7% between 2011 and 2021 to 1,144,900, according to the latest Census. The city is also said to be one of the youngest in Europe with nearly 40% of the population under the age of 25.

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Strong rental yields and capital growth prospects

Property investment in Birmingham often comes with strong yields and the potential to earn capital appreciation. With significant regeneration and development on the way, house prices in the city are expected to increase by a cumulative 19.2% between 2023 and 2027, according to JLL.

The city is also often named one of the best cities to invest in the UK in terms of both return on investment and rental yields. With strong growth and increasing demand, the Birmingham property market has been thriving, providing solid investment opportunities and positive prospects for the future.

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Up-and-coming property investment hotspots

With so much growth happening within Birmingham, there are a few areas that are becoming up-and-coming property investment hotspots, which could provide the potential to earn impressive returns over the long-term.

One area set for substantial growth is the Gun Quarter. It’s expected to become one of the city’s most attractive spots for residential development and could rival the Jewellery Quarter. It was previously known for its manufacturing past, but it’s being transformed into an exciting residential district with high-quality new-builds.

On the fringe of the city centre, Digbeth is another area being targeted for significant regeneration. It used to be the industrial heart of the city, but it’s becoming a hub for arts, culture and digital and independent businesses. The HS2 interchange station at Curzon Street will also be within close proximity.

At The Prestbury Advisory, our team of experts can provide you with knowledge and advice about the Birmingham property market. If you want to speak to us about your next investment opportunity, get in touch by calling us on 01625 725 779 or emailing us at contact@theprestburyadvisory.com.