When considering where to invest in Birmingham investors are increasingly seeking the best up and coming areas in which to secure a property for buy to let investment.
Birmingham’s profile has been on the rise for some time, the UK’s second city has seen a considerable transformation over recent years, ongoing regeneration has expanded the city centre and investment has poured in.
The UK’s second largest business hub, many companies have chosen Birmingham, as headquarters or a base of operations, including BT, HSBC, PwC, KPMG, the HMRC, Deutsche Bank and even BBC Three. HS2 is set only to drive the overall appeal of Birmingham higher as London will be just a short 45 minute journey away.
The most established parts of the city have seen considerable capital growth over recent years and whilst this will continue, the greatest opportunity for appreciation lies within those areas which have not yet seen the strongest growth but have all the factors in place to drive demand and prices upwards.
In this blog, we highlight 3 up and coming areas of the city, for investors considering where to invest in Birmingham.
1. Digbeth and Eastside
The Digbeth area of Birmingham is widely recognised to be the most ‘up and coming area’ of the city meaning it holds the greatest potential for capital growth in coming years. Digbeth is establishing itself as a thriving part of Birmingham, located on the fringe of the city centre, appealing as a place for young professionals to live and work – in recent years it’s been named ‘The coolest place to live in Britain’.
Neighbouring Eastside is seeing incredible transformation under the regeneration plans that are in motion. Birmingham City University’s new campus in Eastside was in fact one of the first projects in the area.
Curzon Street station, the interchange station for HS2 is located in Digbeth making the area perhaps the most convenient place to live for those hoping to make use of the high speed rail services.
Both Eastside and Digbeth are with the Birmingham City Centre Enterprise Zone which has been specifically targeted for huge regeneration. Whilst the areas are already popular and have much to offer as they are, with the developments currently underway and those in the pipeline, the future outlook is exciting.
Property prices in the Digbeth and Eastside areas are reasonable and yields remain strong, over the past 10 years prices in the areas have increased by around 40% and look set to continue on an upward trajectory, likely at a stronger rate as the regeneration of the area boosts demand and spurs on price growth.
Erdington is one of Birmingham’s emerging property markets, it’s an ideal choice for long term investors. The area is already well-established with a good selection of amenities, around 23,000 existing residents, it offers easy access to the city centre.
The area has ambitions for improvement and is seeing continued investment into local facilities such as the new £7.6 million leisure centre.
With its own train station and conveniently located near to the M6 motorway and Birmingham International Airport, the area is already popular with tenants who don’t wish to live in the very centre of Birmingham but want to be well connected and have a selection of amenities nearby.
It’s also popular with students and tenants looking for cheaper accommodation than that found in the city centre without having to compromise on connectivity.
3. City Centre
Whilst this area has seen exceptional regeneration and redevelopment in recent years, Birmingham city centre still represents an opportunity for considerable capital growth and is very much still ‘up and coming’.
Sometimes overlooked, with the neighbouring Jewellery Quarter perhaps being viewed as a prettier option, the city centre has not yet reached its full potential.
Already a busy business hub, as new businesses move into Birmingham city centre and there is an overall return to the office as restrictions are lifted, there is set to be a sharp increase in demand from professionals moving to the area.
Over the past 10 years property prices in Birmingham city centre have increased by around 40% but they still remain reasonable and the average yield is strong compared to other parts of Birmingham.
Why invest in Birmingham?
As UK property investment hotspots go, Birmingham has an excellent pedigree as well as room to grow. Perhaps the most well-connected city in the whole of the UK and HS2 is only set to boost this further, Birmingham is also a strong economic centre in its own right.
No longer deemed an ‘emerging’ area, Birmingham and the wider region are an established location and momentum is building.
The local economy continues to grow as businesses choose Birmingham as a base of operations, wages are increasing year on year and so too are property prices and rental figures. The average property price in Birmingham is just 6.5 times the average salary, compared to London where average property prices are 12 times the average salary, indicating there is considerable room for growth.
Industry experts are predicting that the greatest charge in prices is likely to be over the next 10 years with many outlets forecasting that the city is set to create a large number of property millionaires over that time.
Birmingham has long been on investor radars and many areas have seen significant price growth, in 2021 it is finding the areas that have not yet realised their full potential and choosing them for investment to maximise returns.