Gordon Franks, Managing Partner of Lifestyle Property, suggests it’s time to make your move in Birmingham.
Gordon Franks, Managing Partner of Lifestyle Property, suggests it’s time to make your move in Birmingham.
Property investors looking for superior returns will often look for areas in the midst of regeneration, where significant internal investment is being made. Urban renewal is a sign of future demand, which often leads to an abundance of new amenities, new residents and ultimately, increased value.
The Big City Plan: The Birmingham Big City Plan is an excellent example of regeneration. Starting with the Bullring in 2003, it has grown into an impressive masterplan that’s seen property prices increase by 200% over the last 20 years. This has totally transformed the city, and made it a highly desirable place for both owners and renters.
The new London? Birmingham has been voted the best regional city in the UK to live in, with the cost of living approximately 60% lower than London. Companies such as HSBC, Deutsche Bank, Barclays, KPMG and PwC have recognised these cost savings and relocated many employees to Birmingham. This has boosted the economic output of the city and, importantly for property investors, demand for high quality rental properties.
With a population of just over 1 million and an economic output of £18 billion per year, Birmingham is undoubtably the UK’s second largest city. The grey city some of us may remember from the 1990s is almost unrecognisable today and rapidly becoming its own economic powerhouse.
In the past, UK property investment has focused on London or the areas immediately outside of it, but with a high-speed train connecting London to Birmingham in under 50 minutes expected to commence in 2033, Birmingham must be a consideration for future buy-to-let landlords.
Once in a generation opportunity: Within the regeneration programme, Smithfield in Birmingham’s city centre stands out as an area investors must consider. Birmingham City Council sees Smithfield as an unprecedented chance to make a profound, lasting change for the city. A development purchased today could provide significantly higher returns in both rental income and capital appreciation compared to other areas. Smithfield is defined by its dynamic mix of uses creating a major cultural and leisure destination, much-needed business space and a new residential community.
Birmingham’s house prices are increasing by 6.3% annually, according to HM Land Registry. This is faster than the UK average of 4.5%. Moreover, property investors can expect average rental yields of 5.11% far exceeding those of London’s 2.9%. With rising interest rates, yield becomes more important and these rental increases are significant, helping to compensate for any potentially higher costs of borrowing.
According to the latest house price forecast from JLL, Birmingham’s housing market is expected to grow by a cumulative 19.2% between 2023 and 2027. This far exceeds the expected UK average of 8.9% over the five-year period and as such should be a consideration for all property investors.
Contact Lifestyle Property at www.lfsproperty.com or via WhatsApp on 9635 4397 to discover how easy it is to invest in property.
Gordon Franks is a long-term DB resident and managing partner of Lifestyle Property; he has been assisting his clients in creating wealth through property in Hong Kong since 2004.