Why Invest in Birmingham Buy-to-Let Property in 2024?

Birmingham continues to be the most exciting regional property market in the country. Home to exciting new global businesses, regeneration projects and a vast population, it’s a city filled with tenant demand. As investors turn their attention to Birmingham property, we ask: why invest in Birmingham buy-to-let property in 2024?

Birmingham Buy-to-Let Property

As property investment continues to grow in popularity, why invest in Birmingham buy-to-let property in 2024?

Despite being England’s second city, property values in Birmingham are exceptionally reasonable – according to Property Heatmap, Birmingham investment properties are cheaper on average than other key cities in the Midlands such as Worcester, Leicester and Lichfield. The city is also undergoing an abundance of regeneration, creating fantastic growth potential for 2024 and beyond. It’s no wonder Birmingham remains one of the top investment destinations in Europe and Birmingham buy-to-let property continues to be a flexible, high-performing asset.

Over the last 20 years, around £10 billion of investment has been injected into the city, creating new mixed-use and public spaces as well as a world-class infrastructure. As we cover below, the pipeline for future investment in Birmingham is more ambitious than ever before, and is set to build upon the existing infrastructure completed over the last two decades.

In this growing, bustling city, buy-to-let property continues to be one of the most popular assets with investors and Birmingham represents a prime market – a location that will soon be boosted by the completion of HS2, a continually thriving business district and upcoming regeneration taking the landscape to new heights.

Why Invest in Birmingham Property in 2024: Demand

Demand is vital for building a successful property portfolio and this is why Birmingham investment properties are such a popular asset with investors. With a population of 1.1 million according to the latest census, Birmingham continues to be a key location for young professionals, graduates and key workers that are seeking exceptional employment opportunities.

Birmingham’s population is also one of the youngest in Europe, with 40% under the age of 25 and many working in high-paid roles. This represents a large percentage of the local rental market and demonstrates why the yield performance of Birmingham buy-to-let property is so high.

It’s expected that demand for Birmingham will continue to grow as people continue to leave the capital. With a much more affordable property market and HS2 on the horizon, London leavers are seeing Birmingham as a great alternative to the capital for living while still being able to work within London. 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.

Why Invest in Birmingham Property in 2024: Rental Yields

With Birmingham being one of the most affordable property markets in the country – at least relative to its population and size – it’s delivering above-average yields for investors. According to Rightmove, the average property price in Birmingham is £269,346, just over a third of the average property value in London at £769,222.

When we also consider that Birmingham annual rent growth hit 17.9% over the last year,  and rental prices are still forecast to rise by 19.3% between 2023 and 2027, it’s easy to see why the average rental yield for a Birmingham buy-to-let property is averaging around 5.17%.

This represents a much higher yield than we’re seeing in the South, which is averaging around 2% overall. Unsurprisingly, city-centre postcodes in Birmingham are performing the highest, with areas such as Digbeth, Edgbaston and the Jewellery Quarter leading the way. For investors that are searching for consistently high-yielding property, it becomes more clear why you’d invest in Birmingham in 2024.

Birmingham property investment
Download the 2022 Birmingham Investment Guide

Want to know more about the Birmingham property market? Download the Birmingham Investment Guide today and discover everything you need to know about Birmingham property investment in the new year. In this guide you’ll find:

  • Current market performance
  • Forecasts for the Birmingham property market
  • Key trends impacting the market
  • Best places to invest in Birmingham
Download Guide

Why Invest in Birmingham Property in 2024: Capital Growth

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 will rise in value by a further 19.2% between 2023-2027 – excellent news for those asking ‘why invest in Birmingham buy-to-let property in 2024’.

Why Invest in Birmingham Property in 2024: Graduates

An often overlooked demographic within the rental market is graduates. While students are often targeted by investors with HMO properties, graduates remain one of the top indicators of success for a single-let property strategy.

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 third best in the UK for attracting graduates with no prior links to the city, demonstrating the appeal it holds with the demographic.

Why Invest in Birmingham Property in 2024: Business

You can’t answer the question ‘why invest in Birmingham buy-to-let property in 2024’ without considering the global businesses that dominate the professional space. As Birmingham has built itself into the Midlands powerhouse it is today, it has attracted the likes of HSBC, Deutsche Bank, PwC, the BBC and Goldman Sachs, all of whom now have headquarters in the city.

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.

In terms of new business, 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.

Why Invest in Birmingham Property in 2024: Regeneration

With the opening of the Bullring in 2003, Birmingham created what is now known as the ‘Big City Plan’ – a 20-year project that aimed to widen the city-core by 25%, create over 50,000 new jobs and contribute £2.1 billion to the local economy annually. This ambitious plan was updated into the Our Future City plan for 2040, a framework that aims to update local infrastructure ready for the future.

Since then, mixed-use developments such as Paradise and Arena Central have transformed the city-centre, while projects such as Grand Central and the improvement of sporting facilities for the 2022 Commonweath Games have brought more vibrancy to the city.

This has helped create the amenities that tenants are looking for, cementing Birmingham as one of the most popular, accessible cities on the market today. With further growth on the horizon with the likes of Birmingham Smithfield, as well as the development of further transport infrastructure such as HS2 and the extension of the Midlands Metro service, regeneration will continue to boost demand and with it, property prices.

Why Invest in Birmingham Property in 2024: London vs Birmingham

London has always been the traditionally popular choice for investment. Directly following the financial crisis in 2010, London saw incredible growth that pushed its market to new heights entirely. Since 2016 however, Birmingham has continued to eclipse the capital in terms of rental returns and price growth, putting the second city firmly at the top of the UK market.

Average yields in Birmingham are trending much higher than competitors because of the lifestyle the city can provide and the affordability of the local market. The average property value in Birmingham is a third of that in London and yetyields are nearly three times better, an incredible indicator of potential success for a Birmingham buy-to-let property. Areas such as Kensington, Chelsea, and the City Core achieve yields of 2% or less – a mere fraction of what investors can achieve in Birmingham, with yields reaching 8% in some areas.

While London will no doubt see further growth over the next few years, Birmingham remains a clear alternative for investors that are looking to start building returns immediately.

Want to Know More About Birmingham?

The latest Birmingham Investment Guide has everything you need to know about buy-to-let property in the second city. Fill in the form to the right to download your guide.