Learn why Birmingham’s thriving academic scene, young talent, global appeal, and bright future make it a smart investment choice.
Birmingham, the UK’s second-largest city with a population of 2.8 million, has emerged as a prime property investment location for global investors. The prosperous West Midlands capital is home to the largest city economy outside of London and leads the UK residential forecasts for both house prices and rental growth.
These impressive future growth projections are largely attributed to Birmingham’s status as a world-class university city. Its five prestigious universities attract approximately 100,000 students, including 18,000 international students. Thanks to the city’s robust job market and strategic central location, investing in Birmingham is a good decision for investors drawn to the UK property market, with an impressive graduate retention rate of 49% and the youngest city population in Europe.
The Second City’s growing number of under 25s – making up 40% of its population – has created an increased demand for high-quality accommodation, driving property prices ever-higher. If you’re considering property investment, Birmingham offers unmissable opportunities to capitalise on this.
This article explores why Birmingham’s thriving academic landscape, influx of young talent, international appeal and fantastic growth prospects make it one of the best UK cities to invest in property for 2024 and beyond.
A hub of academic excellence
Birmingham boasts five excellent universities, cementing its position as a major hub for higher education in the UK. At the heart of this academic ecosystem is the University of Birmingham, a prestigious member of the Russell Group. Consistently ranked among the world’s best universities, the University of Birmingham has garnered recognition for its academic prowess and employability outcomes. In 2021, it was named the most targeted university for graduates by leading employers – a clear indicator of the calibre of talent it produces.
The city’s other institutions, including Aston University near Lancaster Wharf, Birmingham City University, Newman University and University College Birmingham, further contribute to its reputation as an educational powerhouse. Together, these universities attract approximately 100,000 students to the city – a student population that is second in size only to London.
This concentration of academic excellence translates into a prime opportunity for property investment in Birmingham. With such a large student population, the demand for student accommodation has never been higher, with tenants looking for quality, comfortable, well-located accommodation. This means you can expect a consistent stream of potential tenants, especially if you own rental properties in student-friendly areas or near university campuses.
Birmingham’s international student appeal
Birmingham has long been renowned for its reputation as a vibrant melting pot of cultures, religions, nationalities and ethnicities. This diversity and inclusivity extends to its universities, which boast a strong international student community of around 18,000.
The significant presence of international students not only enriches Birmingham’s cultural landscape but also provides a valuable support network for newcomers to the country, helping them adjust to life in Britain. Its global popularity is especially pronounced among Middle Eastern and Asian students. Notably, the University of Birmingham hosts the fourth-largest group of Chinese students in the UK.
For property investors, Birmingham’s international appeal translates into a growing market for accommodation that appeals to a wide range of cultural demographics. Appealing to the widest demographic, build-to-rent property in Birmingham presents an unmissable opportunity for savvy property investors.
Why graduates stay in Birmingham
One of Birmingham’s most compelling attributes for property investors, other than its student population, is its impressive graduate retention rate. Across its five universities, 49% of graduates choose to remain in the city to work after completing their studies.
This has an incredible impact on the local property and rental market in Birmingham, creating sustained demand for quality accommodation in the city centre and surrounding areas. It’s also a key factor in the projected growth of Birmingham’s city population, which is set to increase by an incredible 25% by 2040 as part of the Big City Plan.
Many factors contribute to Birmingham’s growing appeal for graduates and young professionals:
Thriving job market in Birmingham city centre
Birmingham’s diverse economy and growing business sector attract a pool of young talent. The presence of blue-chip employers across various industries, including Goldman Sachs, HSBC, PwC and the BBC (soon to open a second headquarters in Birmingham), offers graduates ample opportunities to kickstart their careers without the need to relocate.
In 2023, Birmingham also secured the highest Foreign Direct Investment (FDI) outside of London, including a 50% rise in technology and digital FDI projects. This influx of investment in cutting-edge industries aligns well with the skills and aspirations of Birmingham’s young population, and translates into a wide array of job prospects.
Additionally, the presence of international companies provides opportunities for career advancement and exposure to global business practices, making Birmingham an attractive destination for ambitious young professionals.
Unparalleled transport links
Often dubbed the UK’s most connected city, Birmingham boasts excellent transport links. Birmingham Airport provides easy access to major global cities, with top destinations being Dublin, Amsterdam and Dubai. This is yet another reason why the city is popular with international students, who value the ease of flying home to visit family and friends.
Meanwhile, Birmingham’s extensive rail network and motorway proximity connects it to many other towns and cities throughout the UK. It is a popular location for commuting to London in particular, with a journey time of only 1 hour 25 minutes from Birmingham New Street. This means graduates can explore career opportunities in the capital city while benefiting from Birmingham’s more affordable rent and higher quality homes.
The upcoming HS2 high-speed rail link will further reduce travel time to London to just 49 minutes. Not only will this increase the city’s already impressive connectivity, but it is also predicted to create 31,000 jobs and boost the local economy by £10bn. Making Birmingham a commuter hotspot for millions of Londoners when it completes, HS2 is also cited as a key driver by JLL in Birmingham’s strong house price growth forecasts.
Leading city amenities
Birmingham offers a high quality of life with its diverse range of amenities, including the largest library in Europe. The Library of Birmingham’s world-renowned collection of rare books and archives is a valuable asset to students and graduates looking to further their learning.
The city is also home to the football grounds of three founding football league members – Aston Villa, West Bromwich Albion and Wolverhampton Wanderers – plus 8,000 acres of green spaces. This offers young urban professionals much-needed opportunities for recreation and relaxation.
Besides this, Birmingham is home to a versatile culinary scene (including nine Michelin Starred restaurants – the most outside of London), as well as diverse shops, nightlife and entertainment. From the world-famous Jewellery Quarter to the Birmingham Hippodrome theatre, the Second City effortlessly appeals to graduates seeking a varied and exciting lifestyle.
The youngest city in Europe
Thanks to its world-class university education, high graduate retention rate and thriving job market, Birmingham has the youngest city population in Europe. An impressive 40% of the city’s residents are under 25 years old. This represents a prime rental demographic, along with 25-34 year olds – the most common age group to seek private rented accommodation.
Birmingham’s youthful population fuels the need for modern, flexible and affordable living spaces suited to young adults. It also arguably makes Birmingham an even more attractive prospect for property investors than London, which is an impressive feat in itself.
While London undeniably boasts many excellent opportunities, Birmingham’s combination of affordability, a young population, international appeal and strong economic growth positions it as a more lucrative investment choice in 2024.
High rental demand, low supply for Birmingham property
Birmingham’s high proportion of students, graduates and young professionals means that the demand for high-quality rental homes is only growing. However, the city faces a chronic undersupply of rental property, with significantly more prospective tenants than there are apartments and houses available. Birmingham city centre, in particular, is in desperate need of high-quality, purpose-built rental accommodation.
Forecasts suggest this gap will only widen in the coming years, as the UK-wide housing shortfall approaches 720,000 by 2028. This will continue to drive the strong Birmingham rental market, leading to predicted growth of 22.2% over the next five years – the UK’s highest according to JLL.
The imbalance between housing demand and supply presents an invaluable opportunity for investors. Whether you’re looking to generate rental income or hold properties as appreciating assets, Birmingham’s market dynamics make it an attractive proposition for both UK and overseas buyers.
Supporting your child’s education through property investment
As well as rental income and capital gains, Birmingham property investment offers a unique opportunity for parents considering ways to support their child’s education. Purchasing a property for your child to live in while studying at university in Birmingham can provide them with a comfortable, secure, rent-free accommodation – while simultaneously building your investment portfolio. Alternatively, even if your child doesn’t live in your investment property, your rental returns can help to offset their tuition and accommodation fees.
This strategy offers several advantages:
- Cost-Effective: If your child doesn’t live in the property, the rental income you earn can help to offset their student accommodation costs.
- Flexibility: If your child does live in the property, after they graduate, you have the option to sell the property or rent it out to tenants, providing an ongoing income stream. Alternatively, if they choose to stay in Birmingham after graduation, their home can provide them with a stable base as they begin their career.
- Long-term Investment: With Birmingham’s growing housing prices, the property will likely continue to appreciate in value, offering potential returns when you (or your child) decide to sell.
By investing in property in Birmingham, you’re not only supporting your child’s university journey but also making a sound financial decision to invest in their future. Read more about how you can help fund your child’s education with UK property investment.
Birmingham: A prime investment opportunity
Birmingham stands out as one of the best cities to invest in property in the UK – in 2024 and beyond. Its status as an international university hub, combined with its young population, strong job market and projected property market growth, gives it all the necessary qualities required for a secure long-term investment.
The year to December 2023 saw Birmingham achieve an impressive annual rental growth of 16.7%, outperforming many other major cities including Manchester, Leeds, Edinburgh, Glasgow and Bristol. Such substantial growth, driven by strong demand from young people, promises attractive rental yields for current investors.
All forecasts predict market-leading growth for the Birmingham property market, thanks largely to its attractive universities and graduate population. House prices in the city are projected to rise by 19.9% between 2024 and 2028, compared to a UK-wide average of 17.6%, positioning Birmingham as a prime location for capital growth.
Investing in Birmingham with Select Property
Whether you’re a first-time investor looking to enter the market, an experienced landlord seeking to expand your portfolio, or a parent planning for your child’s future, Birmingham offers diverse opportunities to meet your property investment goals.
At Select Property, we specialise in pairing buyers with prime investment opportunities in the UK’s most promising cities, including Birmingham. We offer an end-to-end in-house investment experience, from selecting the right property to managing your investment for optimal returns.
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.To find out more, contact us today.