MARKET INSIGHT
Birmingham: An Investment Primer
January 22, 2025 • Author: Elliot Rowe
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Ten years ago, Birmingham was THE city coveted by property investors. In recent years Manchester appears to have muscled in on its reputation as the UK’s second city. Here we take a look at what’s driving Birmingham property investment and the untapped value it continues to offer UK property investors.
Why Birmingham is the Top Choice for Property Investors
When it comes to property investment, Birmingham has firmly established itself as a top destination in the UK. As the country’s second-largest city, Birmingham boasts a unique blend of economic growth, cultural vibrancy, and infrastructural development, making it a prime choice for both seasoned and first-time investors. Here’s why Birmingham should be at the top of your investment list.
1
A Thriving Economy
Birmingham’s economy is a powerhouse within the UK, contributing billions annually to the national GDP. The city is home to a diverse range of industries, from finance and professional services to advanced manufacturing and technology. Major employers, including HSBC, PwC, and Jaguar Land Rover, have either expanded or relocated operations to Birmingham, creating a steady demand for housing among professionals.
Additionally, Birmingham’s burgeoning tech sector, often referred to as the “Silicon Canal,” has attracted significant investment. This growth is fuelling job creation and bringing in a younger, skilled workforce—a demographic that typically seeks high-quality rental properties.
2
Unprecedented Infrastructure Development
Birmingham is undergoing a transformational period of infrastructure investment. At the forefront is the High-Speed 2 (HS2) railway project, which will connect Birmingham to London in just 49 minutes. Although the project has been beset by delays its target operation of 2029 will affect property prices massively, with the improved connectivity enhancing the city’s appeal for commuters and businesses alike.
And even beyond HS2, Birmingham is witnessing extensive redevelopment projects. The Big City Plan, a 20-year initiative, is revitalizing the city’s core by creating new commercial, residential, and recreational spaces. The ongoing regeneration of areas like Digbeth, the Jewellery Quarter and Paradise is boosting property values and attracting both renters and buyers.
3
Affordability and High Rental Yields
Compared to London and other southern cities, Birmingham offers significantly more affordable property prices. The average house price in Birmingham is approximately 50% lower than in the capital, making it a more accessible market for investors.
Birmingham Property Price & Rental Forecasts 2025-2029
In their latest forecasts, published in December, Savills predict property prices in Birmingham and the West Midlands will rise on average by 26.4% between 2025-2029. Whilst rents are forecast to increase by over 22% in the coming years reflecting strong demand and delivering attractive returns for buy-to-let investors.
Despite the lower entry cost, Birmingham delivers some of the highest rental yields in the UK, with certain postcodes offering returns of up to 7% or more. This combination of affordability and profitability is particularly appealing in the current economic climate, where investors are seeking value without compromising on returns.
4
A Young and Growing Population
With a population of over 1.1 million and a median age of just 36, Birmingham is one of the youngest cities in Europe. This youthful demographic drives demand for modern, well-located rental properties, especially in vibrant neighbourhoods with easy access to amenities and transport links.
Birmingham’s population is also growing faster than the national average, thanks to internal migration from other UK cities and a steady influx of international residents. This growth is creating a consistent demand for housing, ensuring long-term stability for property investors.
5
Education and Talent Hub
Birmingham boasts five universities, including the prestigious University of Birmingham and Aston University. Together, they attract over 80,000 students annually, many of whom choose to stay in the city after graduation. This influx of students and young professionals provides a steady pool of tenants for rental properties, particularly in areas like Selly Oak, Edgbaston and the city centre.
6
Cultural and Lifestyle Appeal
The city’s vibrant cultural scene is another draw for residents and investors alike. From the internationally renowned Birmingham Symphony Hall to the iconic Bullring shopping centre, there is no shortage of attractions. The culinary scene is thriving too, with Michelin-starred restaurants and a burgeoning street food culture.
Birmingham’s appeal extends to its green spaces as well. Parks such as Cannon Hill and Sutton Park offer residents a chance to unwind, while the city’s extensive canal network adds a unique charm.
7
Strong Capital Growth Prospects
Birmingham Property Growth
Birmingham’s property market has demonstrated impressive growth over the past decade, with house prices rising steadily. This trend is expected to continue, driven by ongoing demand and significant infrastructure investments. Analysts predict that property values in Birmingham will outpace the national average over the next five years by over a quarter (26.5%) making now the perfect time to invest.
8
Government Support for Development
The UK government’s commitment to the Midlands Engine initiative has brought significant investment into Birmingham. This support has facilitated new housing developments, commercial projects, and transportation upgrades, all of which contribute to a thriving property market.
Conclusion: The Time to Invest is Now
Birmingham is more than just a city with potential—it’s a city that’s delivering results. With its robust economy, strategic location, and ambitious development plans, Birmingham offers a rare combination of affordability, strong rental yields, and long-term capital growth. Whether you’re looking to diversify your portfolio or make your first foray into property investment, Birmingham stands out as a smart and secure choice.
Investing in Birmingham today means positioning yourself to benefit from the city’s ongoing transformation and future prosperity. Don’t miss out on the opportunity to be part of one of the UK’s most dynamic property markets.
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About the author
With 16 years of experience in the UK Real Estate Industry working in the UK and the Middle East, Elliot has been advising clients on leading portfolios to achieve their goals and personal targets and has built a network of high-profile investors and property professionals globally.
Associate Director
ELLIOT ROWE
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