Birmingham is a city and metropolitan borough in the West Midlands, England standing on the small River Rea. It is the largest and most populous British city outside London, with a population of 1,101,360 in 2014. Today Birmingham’s economy is dominated by the service sector, is a major international commercial centre.
Find out the best areas are in Birmingham – and why you should buy property here
Birmingham is the largest centre in Great Britain for employment in public administration, education and health and after Leeds the second largest centre outside London for employment in financial and other business services. It is ranked as a beta- world city by the Globalization and World Cities Research Network, the third highest ranking in the country after London and Manchester, and its wider metropolitan economy is the second-largest in the United Kingdom with a GDP of $121.1bn (2014 est., PPP).
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Major companies headquartered in Birmingham include the engineering company IMI plc, and including the wider metropolitan area the city has the largest concentration of major companies outside London and the South East. With major facilities such as the National Exhibition Centre and International Convention Centre Birmingham attracts 42% of the UK’s total conference and exhibition trade. Source: Wikipedia
Birmingham Sees the Fastest Rise in Property Prices
The world is talking about the housing market in Birmingham. Having seen a surge in the amount of people moving from London to the Second City rather than stay in their extortionate homes, it is safe to say that we are seeing the biggest “Boom Time” in 10 to 15 years. Watch our own property guru talk on this topic on BBC Midlands News here.
According to the Office of National Statistics, the ONS, the East Midlands reported the fastest rise in the price of renting or buying a home in the past year. House prices in places like Nottingham, Leicester and Derby, increased by 7.5% by the end of July. We also saw rental price rise by 2.8% by the end of August, which are the fastest in Britain.
Across the UK, house prices have risen 5.1%, which have slowed since mid-2016. The average house price is now £226,000. These figures also show that rental fees paid by to private landlords increased by 1.6% on average in the year to the end of August. However, this is down from 1.8% the previous month.
All parts of England saw a rise in rents over the past year, but the fastest increase was in the East Midlands. The second fastest after the East Midlands was in the East of England with a percentage of 7.1%. This only consolidates the idea that the Midlands property market, as well as national property market, are on the up.
As suspected, the slowest property price growth in England was found to be in London, noting a substantial reversal from the pricing surge demonstrated in the capital in recent years.
It was stated on BBC Midlands Today that “Londoners are moving out of the capital and paying over the asking price here.” However, the average cost of a home in London, at £489,000, which is still much higher when compared with the average cost of £185,000 in the East Midlands.
Bobby Singh, co-founder of loveyourpostcode.com®, comments: “We are only seeing an increase in enquiries from all over the world as we approach autumn/ winter. Most of our new instructions are not being listed on property portals as they are being sold for the full asking price or over to private clients. Let take into consideration 7% annual growth in house values, mortgage interest rates of around 2.00%, a chronic shortage of housing stock, the lowest level of unemployment and massive development in the city centre.”
Birmingham is earning landlords 5.9% to 10.8% yield a year
How are Birmingham property yields at the moment? What’s the difference between yield and monthly return? What even is a rental yield? In this blog, we talk through everything you need to know about Birmingham buy-to-let yields.
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The mindset and tactics you employ to buy your first Birmingham buy to let property needs to be different to the tactics and methodology of buying a home for yourself to live in. The main difference is when purchasing your own property, you may well pay a little more to get the home you (and your family) want, and are less likely to compromise.
When buying for your own use, it is only human nature you will want the best, so that quite often it is at the top end of your budget.
Yet with a buy to let property, if your goal is a higher rental return – a higher price doesn’t always equate to higher monthly returns – in fact quite the opposite.
Inexpensive Birmingham properties can bring in bigger monthly returns. Most landlords use the phrase ‘yield’ instead of monthly return. To calculate the yield on a buy to let property one basically takes the monthly rent, multiplies it by 12 to get the annual rent and then divides it by the value of the property.
This means if one increases the value of the property using this calculation, the subsequent yield drops. Or to put it another way, if a Birmingham buy to let landlord has the decision of two properties that create the same amount of monthly rent, the landlord can increase their rental yield by selecting the lower priced property.
To give you an idea of the sort of returns in Birmingham…
|Birmingham Property type||Avg Price paid (last 12 months) in Birmingham||Avg Rent Achieved in last 12 months in Birmingham||Lower End of Yield Range in Birmingham||Average Yield in Birmingham||Upper End of Yield range in Birmingham|
Now of course these are averages and there will always be properties outside the lower and upper ranges in yields: they are a fair representation of the gross yields you can expect in the Birmingham area.
As we move forward, with the total amount of buy to let mortgages amounting to £199,310,614,000 in the country, landlords need to be aware of the investment performance of their property, especially in the era of tax increases and tax relief reductions. Landlords are looking to maximise their yield – and are doing so by buying cheaper properties.
However, before everyone in Birmingham starts selling their upmarket properties and buying cheap ones, yield isn’t the only factor when deciding on what Birmingham buy to let a property to buy. Void periods (i.e. the time when there isn’t a tenant in the property between tenancies) are an important factor and those properties at the cheaper end of the rental spectrum can suffer higher void periods too.
Apartments can also have service charges and ground rents that aren’t accounted for in these gross yields. Landlords can also make money if the value of the property goes up and for those Birmingham landlords who are looking for capital growth, an altered investment strategy may be required.
In Birmingham, for example, over the last 20 years, this is how the average price paid for the four different types of Birmingham property have changed…
• Birmingham Detached Properties have increased in value by 235.3%
• Birmingham Semi-Detached Properties have increased in value by 246.3%
• Birmingham Terraced Properties have increased in value by 239.2%
• Birmingham Apartments have increased in value by 229.2%
It is very much a balancing act of yield, capital growth and void periods when buying in Birmingham. Every landlord’s investment strategy is unique to them. If you would like a fresh pair of eyes to look at your portfolio, be you a private landlord that doesn’t use a letting agent or a landlord that uses one of my competitors – then feel free to drop in and let’s have a chat.
The top tourist areas to visit in our great city of Birmingham
Birmingham has plenty going for it and no matter what you like or enjoy in life, you’ll find that there is plenty to see and do. While the area is home to many people and a place of work to even more individuals, Birmingham welcomes a considerable number of tourists. This means that there are many tourist areas to look out for, and these are some of the top tourist areas to visit in Birmingham.
The Tolkien Trail – While the success of the motion pictures means that The Lord of The Rings is hugely popular, these books and The Hobbit, have meant that JRR Tolkien has been one of the most famous and popular authors of all time. The writer, who spent time in his youth in Birmingham, was inspired by a number of areas that impacted on his writing and the Tolkien Trail is a hugely popular tourist attraction in the city.
You have the chance to view where Tolkien lived, where he would play as a child and you can also see where he studied; while learning more about the writer and his work.
The mac – Located in Cannon Hill Park, this is a hugely popular attraction due to the diversity of events and exhibits on offer. While you will find that you can gain entry to the building and many of the events for free, there are charges for most of the events.
This is also the setting for craft and food markets throughout the year, which means that it is a great hub of local engagement and interaction. If you are in Birmingham and want to experience local customer, culture and creativity, this is an ideal destination for you to fit into your schedule.
St Martin in the Bullring – It is likely that the Bullring is going to be one of the destinations you visit during your time in Birmingham but you don’t have to spend all of your time shopping. If you are looking for a more spiritual experience or you want to enjoy stunning architecture with a religious style, you’ll find that St Martin in the Bullring is the ideal destination.
The Jewellery Quarter – There is no shortage of fantastic shopping options in Birmingham but The Jewellery Quarter offers something a little bit different. It is believed that this area manufactures around 40% of all of the jewellery made in the United Kingdom.
The fact that this area is a historic one with a notable style of its own means that it is a hugely popular tourist attraction, and it welcomes countless tourists on a daily basis, many of whom are there to see the local sights as opposed to shopping.
Canon Hill Park – There will be times when you want to take things easy and there are some parks and green spaces that will help you to relax and take things easy when you are out in Birmingham. With close to 600 parks and open spaces in the wider Birmingham area, there is no shortage of options but if you’re looking for a chance to unwind, people watch and make the most of your spare time; Cannon Hill Park is the ideal option.
Other options include:
- The Cube/The Mailbox
- Dudley Museum & Art Gallery
- Ikon Gallery
- Martineau Gardens
- Saltwells Local Nature Reserve
- The BBC in the Mailbox
- The Library of Birmingham
- The Thinktank Science Garden
- Weoley Castle
- Wren’s Nest National Nature Reserve
Also, if you have a sweet-tooth and don’t mind venturing a little bit out of your way, Cadbury’s World is sure to be a popular destination when you are visiting Birmingham. You have a chance to learn more about chocolates, see some of your favourite characters and have a fantastic day out.
When it comes to seeing the very best of what Birmingham has to offer, you’ll find that the only limit may be the amount of time you have to cram everything in.
A look at the Birmingham best investment areas in Birmingham over the last 12 months
With Birmingham being the second largest city in the United Kingdom after London, and with a population of 1,101,360; this is a city that is one of the busiest and most vibrant in the whole country. If you take a look at the metropolitan area figures for Birmingham, you’ll find that there is a population of 3.8 million which sees Birmingham listed in the Top 10 for most populated metropolitan areas in Europe.
With so many people already living in the area, and so many other people looking to move to the area, it is understandable that many people across the world have an interest in the Birmingham property market and any changes that have occurred over the last 12 months.
As of April 2017, the average value of property in Birmingham stands at £181,946. The average price paid for property in Birmingham, again as of April 2017, stands at £178,280; and in the past 12 months, property prices in Birmingham have increased by 3.23%. The value of property in Birmingham has risen by 4.12% in the same time frame which means that even recent buyers in Birmingham could have experienced a return on their investment.
Moseley is a great example of a popular Birmingham area
With Birmingham being a major area, there are many different parts of the city to consider and a popular part of Birmingham is Moseley.
In April 2017, the average value of property in Moseley stood at £272,391 while the average price paid for property in Moseley, again as of April 2017, stands at £237,232. Like Birmingham, there has been a rise in property prices of 3.23% in the past 12 months in Moseley. Moseley is found in the south east of the city and it has received a lot of interest in recent years thanks to its classification as the best place in the United Kingdom to enjoy city living.
This was a decision made by the Sunday Times and commendation was made for the fact that the area offers a village style community while providing all of the amenities a person would hope for from city living.
Harborne continues to be one of the most prestigious areas
Harborne may not have the same style, and dare we say it gentrification as Moseley, but it has plenty of places where you can socialise; and it is an area that appeals to young professionals. The appearance of a Michelin starred restaurant is never going to be a bad factor for a local area and as of April 2017, the average value of property in Harborne stood at £326,348. The average price paid for property in Harbone, as of April 2017, stands at £299,576 and in the past 12 months, prices in the area have risen by 3.69%.
Edgbaston’s proximity to the city centre adds to it’s appeal
Edgbaston is another area of Birmingham that is highly regarded and with the University of Birmingham Campus in this part of the city and the Botanical Gardens, there is a lot to enjoy about life in this area. As of April 2017, the average value of property in Edgbaston stands at £260,314 while the average price paid for property, again as of April 2017, stands at £253,214.
While there are many different areas to enjoy and explore in Birmingham, on the whole, this is an area on the up. With the average property price rising by a figure along the lines of 3.23% in the past 12 months, Birmingham is on the up and you can see why so many people are keen to set up home in the city.
Should you still be investing in Birmingham Buy To Let?
If I were a buy to let landlord in Birmingham today, I might feel a little bruised by the assault made on my wallet after being (and will continue to be) ransacked over the last 12 months by HM Treasury’s tax changes to buy to let. To add insult to insult to injury, Brexit has caused a tempering of the Birmingham property market with property prices not increasing by the levels we have seen in the last few years.
I think we might even see a very slight drop in property prices this year, and if Birmingham property prices do drop, the downside to that is first time buyers could be attracted back into the Birmingham property market, meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Birmingham landlord, almost a blessing in disguise.
Birmingham has a population of 1,064,063, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me ..
|Birmingham – Accommodation Type and the Number of Occupiers|
|Owned outright||Owned with a mortgage||Shared ownership (part owned and part rented)||Social rented (aka Council Housing)||Private rented||Living rent free|
Yields will rise if Birmingham property prices fall, which will also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost. If property values were to level off or come down that could help Birmingham landlords add to their portfolio.
Rental demand in Birmingham is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Birmingham landlords should be aware of, the change in the anthropological nature of these 20 something potential Birmingham first time buyers.
I have just come back from a visit to my wife’s relations after a family get together. I got chatting with my wife’s nephew and his partner. Both are in their mid/late twenties, both have decent jobs in Birmingham and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? The answers surprised me as a 40 something, and it will you.
Firstly, they dont want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets. They wanted flexibility to live where they choose and finally, they didn’t like the idea of paying for repairs. All their friend’s feel the same. I was quite taken aback, because buying a house is just not top of the list for these youngsters.
So, as 17.6% of Birmingham people are in the rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Birmingham – because what else are you going to invest in? Give your money to the stock market run by sharp suited city whiz kids – because at least with property – it’s something you can touch- there is nothing like bricks and mortar!
5 cool neighbourhoods in Birmingham to buy a home
Birmingham has a lot of great places where you can enjoy of an exciting night life, cultural events and fine restaurants. Some areas were already popular for that, but Birmingham is always evolving and there might be other places that weren’t on your list. This year you may want to visit these areas while looking for your dream home.
Digbeth – You can read in our blog about the ambitious plans for Digbeth with the Beorma Quarter, that will provide high-standard homes for many people. With many more projects on, such as Fabric Square and over 300 flats that will be completed this year, this is going to be one of the areas with the greatest growth.
Birmingham Smithfield will replace the old market and will include homes, galleries, museums, music venues and open spaces. There will be another development on Bradford Street, which will be a residential square.
Digbeth has traditionally been considered the artistic neighbourhood of Birmingham. If you enjoy art and cultural events you will find many venues, as well as the well-known Custard Factory.
Moseley – Moseley is fighting to keep their liberal and alternative identity. It was recently chosen as one of the best places to live in UK and it will definitely appeal to music lovers.
Because of this, you can expect to pay more for a house in Moseley than in nearby areas. The majority of house sales in there last year were terraced homes, with the average price around £204,433.
Moseley hosts a folk festival and a Jazz Funk & Soul Festival in Moseley Park. It also features the MAC (Midlands Arts Centre), which hosts a variety of theatre, dance, music and comedy performances. Also, if you enjoy food festivals, several of them are organised in Cannon Hill Park.
Kings Heath – Not far from Mosely is Kings Heath, with an independent spirit and much more affordable homes. It is a unique place for shopping with a number of boutiques, the vintage flea market at All Saints Centre, street food market on the village square and the Kings Heath Food Assembly. There are also a lot of cafes, restaurants and some live music venues such as the Hare and Hounds.
If you are looking to buy a home in Kings Heath, you will find plenty of period terraces, being also popular those near the Highbury and Kings Heath parks.
Holloway Head – If you have been reading our blog lately, you will know that this might become the new millionaire’s row. It might be hard to believe because it doesn’t look very appealing when you see it, but developers have a firm belief this area has a great potential and are building a lot of new flats.
Holloway Head is near New Street Station, the Bullring, many pubs, theatres and nightclubs. It is a superb place for party people.
The prices of the flats vary but are due to rise up. Concord House has the record with a sale for £1.8 million, although in 2015 was also sold an apartment in Clydesdale Tower for only £87k.
The Jewellery Quarter – This area will continue its process of transformation this year. More old warehouses will be converted into flats, studios and penthouses. Last year, home prices went from £66k for a studio in St Pauls Square to £690k for a loft developed by Javelin Block in Viceroy House.
Residents in Jewellery Quarter can enjoy a great variety of restaurants, pubs, cafes and a busy night life around St Paul Church Square and the Square Peg.