Birmingham is booming and rapidly becoming a prime property investment hotspot. Often regarded as the UK’s second city, Birmingham is experiencing a remarkable transformation, evolving from an industrial powerhouse into a vibrant, cosmopolitan hub. This shift is drawing an influx of new tenants and creating a significant opportunity for property investors. With the Birmingham property market leading growth forecasts for property prices and rental growth over the next five years (JLL), now is the perfect time to explore why Birmingham is a good city to invest in.
In this blog, we take a look at what’s behind the growing appeal of Birmingham’s property market as well as a place to live and work.
Birmingham city centre opportunities
Birmingham boasts a diverse and thriving job market, with opportunities across sectors such as finance, manufacturing, technology, and healthcare. Major companies like PwC, the BBC, HSBC, Cadbury, and Deloitte have established strong presences in the city.In 2023, the city outperformed all other UK cities outside of London for Foreign Direct Investment (FDI) opportunities. It has a total job market of 540,000 with 70% of the population in employment or self-employed.
A surge in startups and tech companies has contributed to its reputation as one of the UK’s most significant tech and business hubs. It is home to more than 2,000 tech start-ups and more than 6,000 tech businesses overall.
This success is in part due to a supportive business environment with incentives offered and resources to attract and retain companies. For example, the WM SME Grant Programme (WMGP) provides grants to small and medium sized businesses looking to grow and create jobs. Birmingham city centre also benefits from an Enterprise Zone where businesses can benefit from up to 100% business rates relief.
A strong talent pool
Birmingham’s property market growth is underpinned by a steady stream of talent from its five universities, including Russell Group member The University of Birmingham. With 100,000 students studying in the city at any given time and a graduate retention rate of 49%, Birmingham is well-equipped to supply a skilled workforce. The city’s youthful demographic—40% of its 1.14 million population are under 25—ensures a continuous pipeline of future talent, making it an even more attractive property investment hot spot.
Booming residential development market with promising rental yields
Given Birmingham’s strong job market and growing population, the rental demand for housing is significant. House prices in Birmingham are forecasted to grow by 19.9% between 2024-2028, with city centre rental growth expected to reach 22.2% over the same period. For investors, this environment presents a prime opportunity to enter a property investment hot spot like Birmingham, particularly in the build-to-rent market. As more people flock to the city for job opportunities, the demand for high-quality apartments will rise, offering investors promising returns in the form of attractive rental yields and long-term capital appreciation.
Birmingham’s rental market caters to a diverse range of preferences and budgets, from modern city centre apartments to spacious suburban homes. While the city remains more affordable than London and other major UK cities, it also offers luxury properties for those seeking high-end living. This variety makes Birmingham’s property market appealing to young professionals and families alike who are looking for a quality lifestyle.
A city transforming
The large population of young professionals and graduates has driven strong demand for modern, city-centre rental apartments in Birmingham. The city council’s Big City Plan is responding to this demand with an ambitious masterplan that includes the development of 5,000 new homes, the creation of 50,000 jobs, 1.5 million square metres of workspace, and 65,000 square metres of new and improved public spaces. This plan is set to inject £2.1 billion into the local economy annually, further solidifying Birmingham’s status as a property investment hot spot.
Additionally, the Enterprise Zone is expected to contribute £2.3 billion GVA to the local economy, creating 1.1 million square metres of new commercial workspace and over 71,000 jobs. The success of these initiatives has played a crucial role in accelerating the transformation of Birmingham’s property market, making Birmingham a good city to invest in for the long term.
The Paradise Regeneration Scheme is another major project reshaping the heart of Birmingham. Spanning 17 acres, it is one of the largest urban regeneration projects in the UK, set to bring £1.2 billion of investment into the city. Paradise is designed to become a new hub for businesses, attracting both national and international companies, and supporting 10,000 new jobs. This transformation underscores why Birmingham is a leading property investment hot spot.
Businesses already calling Paradise home include:
- Arup
- DLA Piper
- JLL
- PwC
- Goldman Sachs
- AtkinsRealis
- Mills & Reeve
It also aims to enhance the cultural landscape of Birmingham, with new public spaces for events and gatherings, and improved pedestrian routes linking major cultural institutions like the Birmingham Museum and Art Gallery and the library.
A connected city to London and beyond
Birmingham’s connectivity is a key factor in its appeal as a property investment hot spot. With 90% of the UK accessible in less than four hours, thanks to existing high-speed rail links and its central location within the UK’s motorway network, Birmingham’s property market is already a well-connected hub. The upcoming completion of HS2, reducing travel time to London to just 49 minutes, will further enhance the city’s attractiveness. For investors wondering if Birmingham is a good city to invest in, the answer is a resounding yes—improved transport links will drive demand for high-quality rental properties and contribute to rising property values.
Birmingham Airport, located just outside the city, offers both domestic and international flights, further boosting the city’s global connectivity. With its excellent existing infrastructure and the promise of even greater connectivity, Birmingham is a prime location for investors looking to capitalise on a thriving and expanding property market.
Rich in heritage and amenities
Birmingham offers a wealth of cultural and recreational amenities, from the world-renowned Birmingham Symphony Orchestra and the Birmingham Hippodrome to the bustling Bullring shopping centre and the historic Jewellery Quarter. The city’s diverse dining and nightlife scenes, featuring nine Michelin-starred restaurants, make it an appealing destination for both residents and visitors.
Additionally, Birmingham is known for its abundance of green spaces, boasting more parks than Paris and more miles of canals than Venice. These amenities add to the city’s appeal, reinforcing why Birmingham is a good city to invest in.
Why property investors should invest in Birmingham
Is Birmingham a good city to invest in? Absolutely. With its strong residential market, thriving job market, affordability, rich amenities, and excellent transport links, Birmingham is a city on the rise. It stands out as a top choice for residential property investors seeking to capitalise on a property investment hot spot.
Select Property Group’s premium residential brand, Affinity Living has expanded into Birmingham with the now sold out Affinity Living Lancaster Wharf. To find out more about the Birmingham property market and our future investment opportunities in the city, get in touch to arrange an initial chat with one of our property consultants.