Why Invest in Birmingham Buy-to-Let Property in 2025?

A successful property portfolio hinges on consistent tenant demand, and this is where Birmingham truly excels. With a population of over 1.1 million, projected to reach 1.24 million by 2030, Birmingham remains a magnet for young professionals, graduates, and key workers seeking excellent employment opportunities and a vibrant urban lifestyle.

Birmingham also boasts one of Europe’s youngest populations, with a significant portion of the city’s population being under 25, many of whom are in high-paid roles. This demographic actively drives the local rental market, contributing to the city’s high rental yields.

Furthermore, Birmingham is increasingly appealing to those leaving London in search of more affordable living without compromising career prospects. It’s no wonder thousands of Londoners make the move to Birmingham each year, with 242,764 Brits moving from elsewhere in the UK to the second city, demonstrating the sustainable demand a Birmingham investment could offer.

Birmingham’s affordability, relative to its size and population, translates directly into above-average rental yields for investors. As of February 2025, the ONS states that the average monthly private rent in Birmingham was approximately £1,050, a more than 6% increase from the previous year. Better yet for those contemplating why to invest in Birmingham, rental prices are forecast to continue rising, with projections of around 4% in 2025 and 3.5% in 2026 according to the likes of JLL and Savills.

This strong rental growth, coupled with average property prices around £236,000, results in an average rental yield for Birmingham buy-to-let property of around 5.21%. City-centre postcodes, such as B2 (7.4%), B18 (7%), B1 (6.3%) and B3 (6.2%) consistently offer some of the best returns. With such impressive redevelopment schemes, the introduction of HS2, and swathes of inward investment to create new public realms and residential accommodation, Birmingham truly is leading the pack. For investors that are searching for consistently high-yielding property, it becomes more clear why you’d invest in Birmingham in 2025.

Capital growth is always a major objective for property investors and buying a Birmingham buy-to-let property in the city-centre has plenty of potential. Impressively, despite seeing growth of over 70% over the last ten years, Birmingham remains one of the most affordable cities for buy-to-let investment in the country, providing the perfect balance between excellent growth and reasonable property prices.

Thanks to a large-scale program of regeneration, as well as continued demand from movers and workers, further price increases are expected. JLL predicts that Birmingham property values will rise in value by a further 19.9% between over the next four years, outpacing the likes of Leeds and Bristol – excellent news for those asking ‘why invest in Birmingham buy-to-let property in 2025’. 

Graduates represent a crucial demographic for the rental market, particularly for single-let properties. Cities with high graduate retention rates indicate a strong pool of future young professionals who typically seek longer tenancies and possess more secure income streams than students.

This is because graduates are part of the wider ‘young professional’ market that is incredibly attracted to city-centre properties near both the workplace and local amenities. Savvy investors will also understand that graduates are the ‘young professionals’ of tomorrow and will typically opt for much longer tenancies while having a much more secure income stream than students.

This is why we consider cities with good graduate retention as key locations. With over 100,000 students attending one of the five universities in the city, Birmingham’s retention rate of 41% highlights a vast amount of potential demand for buy-to-let property in Birmingham. The second city is also the third best in the UK for attracting graduates with no prior links to the city, demonstrating the appeal it holds with the demographic.

The question “why invest in Birmingham buy-to-let property?” cannot be fully answered without considering its burgeoning business landscape. As Birmingham has transformed into the Midlands powerhouse, it has successfully attracted major global businesses such as HSBC, Deutsche Bank, PwC, the BBC and Goldman Sachs, all of whom now have headquarters in the city. In short, Birmingham business is booming, and this spells good news for buy to let investors.

As household names, these businesses bring waves of new demand from professionals who are also seeking high-quality residential accommodation alongside career opportunities. Birmingham has a ‘professional sector’ of over 100,000 people, the largest in the UK outside of the capital, highlighting the potential tenant base that is already present in the city.

What’s more, Birmingham is leading the pack when it comes to business startups, with over 21,000 new businesses starting up in the city over the past year – this is far in excess of anywhere else in the West Midlands. It’s no wonder that Birmingham also had the largest proportion of new business starts in the UK for five years running – a number that is sure to increase alongside the opening of HS2 as Birmingham’s connectivity and catchment grows even further.