Landlords and property investors bullish about Britain’s second city
Famous for being the second most populous city in the UK and for its commitment to leading architectural design, such as the iconic Bull Ring commercial centre, Birmingham is now making headlines for a new reason, having recently been identified as one of the highest yielding buy-to-let destinations in the UK.
- UK house prices rise 2.1% in last 3 months to Feb 2014 (Halifax)
- Population of Birmingham set to rise by 150,000 people by 2031
- Over 80,000 new homes in the city required to meet demand
A huge market
Buy-to-let is increasingly being seen as one of the most exciting and dynamic investment markets available within the UK. With house prices rising by 2.1% (last 3 months to Feb 2014, Halifax) and a construction sector that is lagging hugely behind demand, many families are seeking rental properties rather than purchasing their own home.
The private rented sector has been growing steadily over the past decade, but has accelerated significantly within the last 12 months as the UK’s housing market has picked up, with the latest Sequence index showing a 15% year on year increase in new tenancies across the UK. At the same time, home ownership is falling, dropping from 71% of households in 2003 to just 65% currently, according to the latest English Housing Survey from the Department of Communities and Local Government.
Hand in hand with the increased demand for rented accommodation, monthly rental prices have been rising over the past year, with the Sequence index showing an increase of 8% over the period. The combination of factors has made the UK buy-to-let market an extremely attractive investment option – and nowhere more so than in Birmingham.
Big plans for a big city
As befits its status as England’s second city, Birmingham has some big plans in place to ensure it retains its reputation as one of the most exciting places in the UK to live and do business. The visionary 20 year Big City Plan is set to create a host of new business facilities, transportation links and public spaces in Birmingham during the plan’s life, adding 50,000 jobs and contributing £2.1 billion to the economy every year.
The planned High Speed Two (HS2) rail link, which will propel Britain’s Victorian railways into the 21st century and cut journey times between Birmingham and London, is scheduled to begin construction in 2017 and will further enhance Birmingham’s reputation as a leading commercial and business-oriented city. Once finished, HS2 should allow passengers to travel from London to Birmingham in just 48 minutes.
Beating the crowds
The ambitious regeneration and rail plans are set to create tens of thousands of jobs in Birmingham, attracting a host of new workers to the city. By 2031 an additional 150,000 people will call Birmingham home with some 80,000 new homes required to meet this growing demand.
Ray Withers, CEO of leading property investment firm Property Frontiers and a man from Birmingham himself, explains how this is creating the perfect buy-to-let environment within Birmingham,
“House prices in Birmingham are increasing, but remain consistently below the levels we are seeing in London and the South East. Concurrently, rental yields in Birmingham are higher than one can expect in London. With lower purchase prices and higher yields, it might well be the UK’s second city but it’s not second choice with smart investors avoiding the capital in favour of buy-to-let property in Birmingham.”
The latest nationwide date from Move with Us supports Mr Withers’ expert conclusions, showing Birmingham as the highest yielding rental area in the UK when considering rental income as a percentage of the property’s purchase price.
The news is indeed well timed as Property Frontiers has just released an exciting new off-market opportunity in Birmingham to landlords and investors. The prime city centre residential development will consist of studio, 1 and 2 bedroom luxury apartments with up to 9% yields and guaranteed rental options also available.
Available today from just £95,000, prices will rise by at least 10% on 1st April 2014 so contact the team on +44 1865 202 700 or visit www.propertyfrontiers.com.