The UK’s second city is establishing itself as one of the most popular towns in Europe to invest in. With a central location, Birmingham is attracting billions of pounds worth of investment in citywide commercial, retail and residential space – developing historic infrastructure projects and building the largest professional services hub outside of London.
Its affordability, economic strength and infrastructural developments are making the city an attractive prospect.
Global businesses are actively choosing to relocate to this city to benefit from motivated and trained talent pool. After winning the bid to host the 2022 Commonwealth Games, Birmingham has started a journey of regeneration with developments including Birmingham Smithfield, Arena Central, Paradise, HS2 and the Midlands Metro extension. Birmingham is seeing more inward investment than any other region.
By 2039, the population is predicted to rise by 171,000, meaning a total population of 1.3 million in just over 20 years. With city centre living still in vogue, residential undersupply is a very real threat that’s creating an incredibly competitive market – ideal for investors that want rental income and capital growth.
This high demand for city centre living has increased the property prices by 15% since 2015 and is forecasting a further 14% by 2020.
From 1.1 million people living in Birmingham, nearly 46% is estimated to be under the age of 30, making it the youngest city in Europe. With a student base of nearly 65,000 students spread across five universities and two university colleges, both businesses and residential landlords have access to a vast pool of qualified, ambitious workforce.
It’s this talented workforce that has helped Birmingham build the strongest economy outside of London, worth nearly £24.8 billion and growing.
The 2022 Games represents the start of the Big City Plan, designed to increase the size of the city core by 25% and forecasting 50,000 new vacancies. The Big City Plan encompasses Paradise, Arena Central and Birmingham Smithfield amongst completed developments such as Grand Central.
Paradise is the most significant development, a £700 million project that will introduce 1.8 million sq. ft of Grade A office, retail and leisure space. It will also open up the gateway between the city centre and the Westside – home to Brindleyplace and Deutsche Bank, the Library of Birmingham, Birmingham Symphony Hall and ICC. One of the UK’s ‘Big Four’ financial services firm, PwC, has already agreed to a pre-let within One Chamberlain Square in Paradise, showing the attraction the city has for global businesses.
Arena Central will sit a stone’s throw from the Mailbox and represent another landmark development for Birmingham. As the site of the new HSBC UK headquarters, Arena also received the city’s biggest pre-let in a decade during 2017 – 240,000 sq. ft dedicated to housing the Midlands regional hub for HMRC.
Birmingham Smithfield is an equally important development for the Eastside, a 14-hectare site that will cost £500 million and completely transform the area into a vibrant retail, leisure and residential destination. Birmingham Smithfield is expected to create 3,000 new jobs and add £470 million GVA to the local economy.
Birmingham’s position at the heart of the UK makes it the most connected city in the country, with excellent links to Edinburgh, Manchester and London. This plays a major part in the city’s ever-growing attraction as a hotspot for business and manufacturing, boosting the city’s continued economic success and contributing to workforce jobs in the West Midlands increasing by 110,000 last year, one of the biggest rises in the country.
HS2 is perhaps the most important infrastructural development in Europe right now. Worth £56 billion and set to complete in 2026, this ambitious project will see travel times between Birmingham and London slashed to 49 minutes. Aside from offering London commuters incredible access to the second city, HS2 will kick start a £1 billion regeneration of the Eastside area around Birmingham Curzon.
Considering all the investments mentioned above, it’s not surprising that Birmingham topped the list for house price growth last year – with an uplift of 7.5% on average.
Affordable prices with the city’s under supply of available homes to meet growing demand, Birmingham property investment represents a potentially lucrative investment opportunity.