Why is it that prime property buyers just can’t get enough of Birmingham?
- Prime Birmingham residential values to hit £500 PSF by 2020 (Knight Frank)
- West Midlands property prices rising at fastest rate in UK (Halifax)
- Birmingham’s innovation and dynamism, along with HS2, capture attention of overseas investors (Surrenden Invest)
It wasn’t too long ago that those with a passion for property almost took pride in never looking further than the prime London property market. Now, however, it is Birmingham that has captured investors’ imaginations – and for more than purely financial reasons.
“Property investment is fundamentally about making money, but as the buy-to-let market has matured, we’ve seen a shift in investors’ outlook. There’s something compelling about owning a property in Birmingham and investors are keen to be part of the action. It’s a city with a real buzz about it, so while London stagnates, investors are seeking to be a part of the action in Birmingham.”
Jonathan Stephens, MD, Surrenden Invest
The UK’s second city certainly has the right credentials in terms of its numbers. The West Midlands housing market saw annual house price growth of 7% during Q2 2018, according to Halifax, meaning that prices there are rising significantly faster than anywhere else in the UK (the next highest house price increases were in Wales and Scotland, which both recorded growth of 3.7%). Within Birmingham itself, the pace of increase appears to be even faster, with Hometrack’s UK Cities House Price Index reporting a rise of 2.9% in the past year alone.
But price rises are only half of the story when it comes to Birmingham. The city also provides exceptional value in terms of its asking prices. The average Birmingham property costs just £161,100. That’s cheaper than the average for Manchester, Leicester, Leeds and a wide range of other regional cities. It’s also well below the UK average of £218,600, according to Hometrack’s figures.
The story so far as prime city centre property is concerned is even more compelling. In London, prime sales volumes have plummeted by 16.9% over the past year, according to the Q2 2018 Coutts London Prime Property Index, while prices have fallen by 1.7%. This is in stark contrast to Birmingham, where Knight Frank has projected that prime residential values will continue rising, hitting £500 per square foot by 2020.
“The numbers stack up so well in Birmingham that it’s easy to see why the city’s prime residential market has captured such attention both within the UK and overseas. A range of other factors come into play too. Birmingham is known for its striking, modern architecture and has an outstanding reputation as a shopping and leisure destination. Cultural pursuits and economic opportunities abound and the city has become a magnet for big businesses looking to relocate away from the expense and congestion of London.”
Jonathan Stephens, MD, Surrenden Invest
HSBC, Barclays, Deutsche Bank and HMRC are among those to have been drawn to Birmingham in recent years. Now, the city is also among the top three options for the location of Channel 4’s new headquarters. And still property prices remain well below the UK average.
HS2 has played an important role in elevating Birmingham in the eyes of investors in recent years. The high speed network has pushed forward a number of regeneration schemes within the city, with enhanced connectivity to London and Europe seen as a key driver for Birmingham’s rising reputation overseas. Regeneration work is widespread, with areas such as Digbeth and Smithfield benefitting particularly.
“One of the most notable things we’re seeing about the investment that is pouring into Birmingham is the focus on city centre living. Residences in the vicinity of iconic buildings, such as the Bullring or the Mailbox, are commanding attention from investors looking for premium properties in top locations.”
Jonathan Stephens, MD, Surrenden Invest
Interest in the city is so strong that leading property investment agency Surrenden Invest has been taken aback at the speed with which homes at its Westminster Works development are selling. Priced from £165,000, the properties provide investors with a 5% NET yield and plenty of scope for capital growth. The Surrenden Invest team is now poised to unveil a further Birmingham development, in close proximity to the Mailbox, although further details of this are currently being kept under wraps. One thing is for certain though – in this dynamic and fast-paced city, the next innovation is just around the corner.
For more information, visit www.surrendeninvest.com or call 0203 3726 499