5 reasons why this UK city should be your next real estate investment location

The post-pandemic real estate boom has seen many investors searching for their next investment opportunity. Most people start by establishing an idea of ​​the budget and investment goals. So the third question arises – where to invest?

Although the pandemic has changed the way we live, the key factor when it comes to real estate investing remains the same – “location, location, location”.

More people than ever are working from home or are adopting a combination of home and office work as the “new normal”. Many predicted that this would lead to a trend of large-scale deurbanization among tenants, due to downtown prices and less emphasis on commuting.

The reality was quite the opposite. Tenants returning to the office for at least part of their working week have sparked strong rent growth in the UK’s largest city centres. In fact, recent data from Rightmove’s quarterly Rental Trends Tracker reveals that some town centers have not only rebounded from declines caused by the pandemic, but have achieved double-digit growth and surpassed the national average.

One city in particular is gaining global recognition for its strong investment potential. Second city of the United Kingdom by its size and its population, Birmingham.

5 reasons why Birmingham is a great investment opportunity for 2022:

  1. 1. High demand

Growing by 10,000 people a year, Birmingham’s rapidly growing population is currently 1.14 million. With the youngest population in Europe and a graduate retention rate of 41%, a quarter of the city’s population rents their accommodation.

A world-class business center due to its prime Midlands location and self-sustaining economy, Birmingham is now a popular alternative to the capital for blue-chip employers wishing to set up their headquarters there. Global companies such as Goldman Sachs, Deloitte and HSBC Bank, to name a few. This growing trend is attracting a talent pool of young professionals – a key demographic in the Build to Rent industry.

  1. 2. Imbalance of supply and demand

Despite this rapidly expanding population, Birmingham has a relatively low supply of purpose-built rental accommodation. This imbalance between supply and demand presents a prime opportunity for Build to Rent developers, investors and their tenants.

As tenants expect more from their homes than ever before and are willing to pay a premium, Build to Rent properties are the city center home of choice for millions of tenants across the UK.

  1. 3. Rents are rising

Across Britain, rents are rising at the fastest pace ever recorded by Rightmove, now rising 8.6% a year outside London. In September 2021, increased demand in Birmingham saw rents rise 10% from pre-pandemic levels.

With rents and demand at an all-time high in Birmingham, rental yields for 2022 are averaging 6.56% according to recent data from Zoopla. This figure is above the UK average and is set to rise further according to the JLL report, which predicts rental prices in Birmingham could increase by 12% over the next five years – the highest level of growth in the country.

  1. 4. Real estate prices are rising

House prices in the city are also rising, with Rightmove reporting an increase in the average price of a property sold of 12% over last year and 17% over 2018.

With the implementation of the government’s £107 billion High-Speed ​​2 (HS2) rail network, property prices in Birmingham are expected to rise as a direct result. Nearly halving the journey time to London by train from 90 to just 49 minutes by 2029, Birmingham will be an prospect for millions of Londoners looking for cheaper rent and a better quality of life .

  1. 5. New jobs in town

As well as increasing Birmingham’s global reputation as a key business and tourist destination, the positive economic impact of HS2 has already benefited the city, as HS2 Ltd set up its construction headquarters in the Snow Hill area, creating thus 1,500 first jobs.

It is part of the Snow Hill Master Plan, a 20-year plan to improve the area’s key assets, create more jobs and stimulate Birmingham’s growth and regeneration activity. Including a £50million refurbishment of Snow Hill station, the creation of a fourth platform and wider regeneration could create an additional 7,700 jobs, bringing more tenants to the city.

While Birmingham has been a popular investment location in recent years due to its Midlands location, population size and economy, there has never been a better time to invest in the second city. from the United Kingdom. Recognized globally for its strong development potential and its incredibly promising outlook for 2022 and beyond, the future looks bright for Birmingham. All that’s missing is you!

Find out more about investing in Birmingham in our guide.