In recent years, Birmingham has emerged as a standout property investment opportunity in the UK, attracting both domestic and international property investors. Download our free Investor Guide to Birmingham property in 2024 for more.
According to JLL’s latest residential forecasts, Birmingham is set to outpace all other UK cities for both house price and rental growth over the next five years. With predicted rental growth of 22.2% and average property price growth of 19.9%, Birmingham is an unmissable addition to any property investment portfolio.
But what key factors are driving the strong performance of Birmingham property? Here are 6 reasons why Birmingham’s property market is outperforming all other UK cities, including London.
1. Rapidly growing population
Birmingham’s increasing population is adding to a chronic shortfall of available homes across the rental market and sales markets, driving rents and property prices. At 16.7%, Birmingham saw the highest annual rental market growth in the UK in 2023 – a prime opportunity for build-to-rent property investors. Average rents in Birmingham now sit at an impressive £1,622 pcm (accurate as of August 2024), climbing higher in premium developments.
Set to continue, Birmingham’s city population is expected to grow by a further 25% by 2040, thanks to major Birmingham regeneration projects, the Big City Plan. This 20-year city centre masterplan aims to bring £2.1 billion to the local economy each year. With such ambitious development plans, Birmingham is not only expanding but also enhancing its appeal as a modern metropolis where people want to live, work and invest.
2. The youngest city population in Europe
With 40% of its inhabitants under the age of 25, Birmingham has the youngest city population in Europe. Largely down to its five universities and 49% graduate retention rate, this youthful demographic brings vitality to the Birmingham property market, driving rental demand for modern, flexible living spaces that cater to young professionals and graduates.
Russell Group institution, the University of Birmingham, was recognised as the most targeted university for graduates by leading employers in 2021. Producing and attracting a growing talent pool of young professionals, an estimated 4,500 homes are needed each year to accommodate Birmingham’s rising rental demand.
3. Home to global blue-chip employers
The government’s ‘ Levelling-Up Agenda’ has been paramount in creating job opportunities outside of London, with major blue-chip employers such as Goldman Sachs, HSBC, and the BBC permanently relocating to Birmingham.
Now a global hub for business, Birmingham is also home to major companies including Deutsche Bank, Deloitte, PWC and Jaguar Land Rover. Also the birthplace of Cadbury’s chocolate, Lloyds Bank, Gymshark and Bird’s Custard, Birmingham has a rich entrepreneurial legacy.
Many UK government departments have also relocated to Birmingham as part of the ‘Places For Growth’ programme. Thousands of Civil Servants have already relocated from London to Birmingham, with more to come by 2025. Now one of the UK’s best cities for job opportunities, the Birmingham property market will continue to soar.
4. Highest FDI (Foreign Direct Investment) outside of London in 2023
Reaching a decade high, Birmingham was the UK’s most successful city for FDI outside of London. Attracting 67 inward investment projects in 2023, a 139% increase on the year before, this was more than twice the total of any other UK city outside of London.
Birmingham’s success was driven by technology and digital investment, with the city recording a 50% rise in digital FDI projects in 2023 compared to 2022. Peter Arnold, EY UK Chief Economist, cited the legacy of the 2022 Commonwealth Games as a key factor for growth.
5. Enhanced connectivity with HS2 and Birmingham Airport expansion
The UK government’s high-speed railway HS2 will connect England’s largest cities, Birmingham and London, cutting the journey time to just 49 minutes and making Birmingham a commuter hotspot over night for millions of Londoners.
The carbon-neutral bullet train will reduce the travel time to the capital to just 49 minutes, making Birmingham an even more attractive location for both residential and commercial property investments.
Enhanced connectivity can drastically improve property investment values and average rental incomes, making HS2 a game-changer for the Birmingham property market.
- Cited as a key driver for strong property market forecasts
- The UK’s £66bn bullet train, providing carbon-neutral journeys between London and Birmingham
- Cutting the journey time to just 49 minutes, HS2 will be the fastest train in Europe
- A predicted £10bn economic boost to the West Midlands over 10 years
- The creation of 31,000 jobs estimated
Birmingham Airport is making significant progress on its £300 million capital investment, which includes a major expansion and the construction of a new airport security hall. This ambitious project is set to increase the airport’s capacity to 18 million passengers a year by 2033. Designed to improve the airport experience for passengers, Birmingham’s central England location will make it one of the UK’s most popular airports.
6. Major regeneration projects transforming Birmingham City Centre
With iconic masterplan projects like The Big City Plan, Our Future City (OFC) Framework, and the Paradise regeneration scheme, Birmingham is solidifying its status as a vibrant metropolis. Each with the objective to make Birmingham somewhere people choose to work, live and invest, these projects will transform the city’s economy.
The £700 million Paradise development is set to dominate the city centre as the most ambitious development Birmingham has seen for a generation. With 1.8 million sq ft of space being created by the project, the final result will include cafes, restaurants, hotels, shops and prime commercial real estate spaces that are sure to be snapped up by global businesses looking to base themselves outside of London.
Birmingham property investment opportunities
Birmingham’s diverse property market offers a broad choice of residential and commercial developments at varied price points. But it’s the city’s residential landscape that offers the most exciting growth prospects and opportunities for investors.
Keep an eye out for our latest residential investment in Birmingham city centre – Select Property’s second Birmingham launch – coming soon and set to revolutionise luxury living in the West Midlands. In the meantime download our Birmingham property investment guide for more insight.
Contact us to speak to a property consultant about how Birmingham property could work as an investment for you. Keep in mind that we have a range of property investment opportunities in the UK’s highest-performing investment cities, Manchester and Sheffield.
About Select Property
Select Property is an award-winning UK property developer and investment partner, offering a one-stop property investment service from sales and property management through to exit strategy via our in-house property management company, Select Residential.
Contact us to speak to a property consultant about your next investment.