Rental Yields in Birmingham in 2025

Birmingham property prices are on the rise, so it’s no surprise that rents are on a similar upward trajectory. As of 2023, the average Birmingham rental yield sits at 5.15% based upon an average property price of £240,000 and average rent of £1,029.

Birmingham remains one of the top alternatives to London for UK renters. The Birmingham market forecast for 2025 suggests it is more affordable, forecasting higher property price growth and offering much better returns. Furthermore, the average salary to house price ratio in Birmingham sits at 6.6, whereas the majority of London boroughs surpass 10, indicating that you can make your salary stretch further in Birmingham without giving up on the appeal of city living. As such, we are seeing an incredible wave of demand for property across Birmingham that has supported further growth.

Rental prices in Birmingham are expected to continue rising, eventually increasing by 22.2% between 2024 and 2028 according to JLL, a prediction matched only by Edinburgh.

This will be primarily driven by the city’s ongoing redevelopment, more professional workers joining the market and the continued progress of HS2 bringing further investment.

If you’re looking to invest in buy-to-let property with the intent of achieving rental returns, average Birmingham rental yields differ from postcode to postcode.

Many different factors can impact an area’s returns and while supply and demand is the primary driver, factors such as amenities, forecasted growth, local businesses and transport links all have an effect.

As a whole, Birmingham rental yields are forecast to be strong going forward and it remains one of the most competitive markets in the UK, meaning there’s plenty of potential to continue surpassing current performance. Below are the top rental yields in Birmingham for 2025 according to PropertyData as of January 2025:

The Birmingham rental market is popular for investors because it can offer affordability, high-end living and can be adapted to multiple strategies – such as traditional buy-to-let or short-term letting.

The adoption of the ‘Big City Plan’ has helped the Birmingham rental market lead the way against other major cities – attracting waves of new professional workers, families and renters – while providing them with the amenities that they’re looking for. 

This meant that when London’s decline started to take place, Birmingham was in the ideal position to offer an alternative, attracting plenty of tenant demand in key growth areas. While global businesses set up shop in the second city, the allure of projects such as Arena Central, Paradise, Smithfield and HS2 have cemented Birmingham as a rental hotspot. With the BBC also upheaving to Digbeth, huge opportunities in the wake of the Commonwealth Games, and the Birmingham Central Framework 2040 expected to bring 74,000 jobs and even more business opportunities to the region, many more people are anticipated to move into the region over the next few years.

HS2, for example, would open up Birmingham rental market to a much broader London audience. This would allow London workers to live in Birmingham but still enjoy the benefits of the capital, attracting more professionals to Birmingham’s rental market and increasing demand even further. With Birmingham rental prices still much lower than London, this would benefit both London professionals and Birmingham landlords. 

With 65,000 new homes needed in Birmingham by 2031 in order to meet quotas and keep up with growing demand, we can immediately see the potential for a rental property in the area.

What is the best Birmingham buy-to-let property for rental yields? For investors targeting a strategy specifically around rental yields, understanding the property types best suited for delivering rental yields can be incredibly helpful.

This suggests that apartments in Birmingham deliver the best yields in the market, achieving yields of 6.27% when using data from the ONS. This far exceeds the average rental yield across all Birmingham properties of 5.15%, as does the average yield of terraced homes in Birmingham which achieve an average yield of 5.53%. Better yet, flats and apartments have a low initial average purchasing cost of just £164,000, making this type of investment far more affordable than other forms. So, if you are looking to start your investment portfolio in Birmingham, purchasing an apartment in one of the city’s most lucrative districts, such as the city centre, Digbeth or the Jewellery Quarter, is a fantastic place to begin. 

On the other hand, detached properties offer the lowest returns out of all the property types with an average yield of 3.68%. This may be because these properties largely appeal to families, who may be better positioned to purchase properties outright rather than rent from a private landlord.

Just remember, the figures above represent gross yields and don’t factor in running costs. Within your own investment, you may need to consider potential management costs, multiple properties and the size of the property. For more information, be sure to contact an investment professional or member of the Joseph Mews team.

Rental yields are incredibly sensitive to external factors and can change quickly.

Typically, yields are mainly driven by demand and the competitiveness of the market you’re investing in. This means that consistent, in-depth research is key and should be a major part of your wider due diligence. You don’t just want to consider rents and yields now, you need to consider them going forward.

At the same time, research external factors that could benefit your investment. Things like career opportunities, redevelopment, undersupply, transport links and tenant demographics are all factors that could impact your yield.

Tenant demographics are also very important as they will decide the strategy and property type that you opt for. While areas that have a large student population will suit a HMO investment, for example, other areas may be more suited to a 2-bedroom apartment that appeals to young professionals or sharers.