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With a population growing by 10,000 people a year, property demand in Birmingham is far outweighing supply. This housing shortfall is expected to be over 28,000 homes by 2031, underpinning Birmingham’s performance a prime investment location.
Kickstarted by millions of tenants returning to the office this year, the urbanisation trend has triggered strong rental growth in the UK’s largest urban centres. Recent data from Rightmove’s quarterly Rental Trends Tracker reveals that Birmingham has not only bounced back from the declines caused by the pandemic but has hit double digit growth and overtaken the national average, at 10% higher than pre-pandemic levels.
Although Birmingham is a city in high demand, tenants are expecting more than ever from their homes and are willing to pay a premium for their desired living experience. We know that renter priorities have changed since the start of the pandemic, but what exactly are Birmingham’s tenants looking for?
What are Birmingham’s Tenants Looking For?
With 40% of core inhabitants under the age of 25, Birmingham has the youngest city population in Europe. This is partially down to the city’s high student population and 41% graduate retention rate across its five universities.
Studies show that Generation-Z take more of an interest in mental wellbeing and are moving towards a ‘greener’ way of living than previous generations. As this age demographic establishes itself in the rental market, we are seeing a growing trend of demand for access to outdoor green space. In fact, data from over 700,000 users of the rental app, Movebubble, revealed that interest in outdoor terraces increased by 204% last year.
Build to Rent developers are prioritising outdoor spaces like garden terraces and courtyards as a direct response to tenant demand. In a city with over 8,000 acres of parks and green space, purpose-built developments with immediate access are an attractive prospect to many of Birmingham’s tenants.
Increasingly recognised as a global business hub, Birmingham’s graduates have stronger prospects than ever, with an estimated 50,000 new jobs being created as part of the 20-year Big City Plan. With major business districts such as Colmore Row and Snow Hill, home to global headquarters of Goldman Sachs and HSBC Bank, prime central location is a key priority of Birmingham’s growing talent pool. Combining prime location with access to outdoor space will offer tenants the ideal work/life balance.
As most companies (43 out of 50 of the UK’s biggest employers) embrace a mix of home and office working, employees are looking for apartments with co-working space as well as commutable distance. Many city centre apartments lack the space for desks, which is why most Build to Rent apartments factor in live/work lounges, private working booths and coffee stations, encouraging residents to use these amenities as an extension of their apartments.
The growing trend of Londoners emigrating the capital to live in regional cities for a better living experience and more affordable rent is here to stay.
Rental demand from this key demographic is expected to surge as the government’s GBP 106 billon high-speed railway, High-Speed 2 (HS2), gets closer to completion. HS2 will transform Birmingham into a commuter hotspot virtually overnight for millions of Londoners, cutting travel time to the capital from an hour and a half to just 49 minutes – a standard commute time for people living in Zones 3 or 4 of London.
Birmingham is an attractive prospect for Londoners who are used to cramped living conditions, high rents and typically no amenities or outdoor space. Although Birmingham has a comparatively low supply of purpose-built properties for its expanding population, this is a prime opportunity for developers and investors in the years leading up to HS2, which will complete between 2029-2033. Build to Rent developments outside of London typically include amenities including an on-site gym, co-working space, resident lounges, garden terraces, a pet-friendly ethos, and spacious modern apartments.
Pet ownership increased by 18% between 2019-2022 alone due to the increased time spent at home during the pandemic. Despite almost half of UK households keeping a pet, a survey by SpareRoom found that 78% of renters had experienced difficulty finding a pet-friendly home.
As city-centre dogs and cats become more popular in the UK, pet-friendly homes are a key differentiator from competitors in the rental market. In fact, a 2020 report found that all 10 of the highest-rated Build to Rent developments were pet-friendly. Whilst historically, investors avoided allowing pets due to fears of property damage, residents with pets must sign a policy, agreeing they are responsible for any damage or inconvenience.
Select Property Group’s premium residential brand, Affinity Living, is expanding to Birmingham following the incredible successful of four Manchester developments.
Promising the brand’s standards of prime central location, premium amenities, outdoor space, and a pet-friendly ethos, Affinity Living Lancaster Wharf will bring a new standard of city centre living to Birmingham – a city where a quarter of households rent their properties.
Affinity Living Lancaster Wharf is an incredible opportunity for Birmingham, our investors and their tenants. Find out more here.