08 Apr Birmingham Property Market Overview 2024
Birmingham Property Market Overview:
As the largest city outside of London in the UK, Birmingham is experiencing significant rental growth and a surge in house prices. The city’s appeal is boosted by its central location in the Midlands and its excellent transport links, which will be further enhanced by the long-awaited HS2 scheme. Birmingham is becoming an increasingly popular choice for investors, and the current market conditions indicate that now is an opportune time to invest in the city, given the widening gap between housing demand and supply.
Birmingham House Prices
According to recent data, house prices in Birmingham are expected to continue rising. Savills predicts that by 2025, house prices in the city will increase by 24%, presenting an attractive prospect for both current and future investors. A significant factor driving this surge is the incoming HS2 railway network, which will reduce commute times to London to just under 50 minutes by 2029. This improvement is likely to appeal to Londoners seeking a more affordable cost of living while retaining their jobs in the capital.
Birmingham Rents
The upward trend in house prices is mirrored in the rental market. Rental values in Birmingham are currently 10% higher than pre-pandemic levels. JLL forecasts that rental prices will rise by an additional 12% over the next five years, the greatest increase nationwide. This growth, coupled with record-breaking demand for house sales, has pushed average rental yields in the city to around 6.5% in 2023, making Birmingham an appealing prospect for investors. The shortage of rental properties, with availability on online portals being 35% to 40% below the previous decade’s average, has intensified competition for each property.
Demand and Supply Imbalance
The demand for house purchases in Birmingham is at an all-time high, and supply levels are struggling to keep up. This imbalance has led to increased competition, with investors eager to acquire any available properties. Market conditions currently favour cash purchasers and buyers with no onward chain, as many properties are sold within just a few days of being listed.
This high demand is expected to continue growing, especially in light of Birmingham hosting the Commonwealth Games in 2022, which has brought international attention to the city. The event has also spurred plans to build 5,000 new homes by 2040 and an additional 10,000 rental properties over the next decade. These developments, along with the improvements to the city’s transport system due to the new HS2 rail network, will further bolster Birmingham’s property market.