If there’s only one statement to make about Birmingham in 2017, it’s that Birmingham was booming.
In the year of the Brexit vote, Birmingham received record levels of inward investment: Plans for HS2 took major steps forward, HSBC’s move to the UK’s second city was cemented, the city secured its biggest pre-let in a decade from the Government, and big four financial business, PwC pre-let an entire eight-storey building at One Chamberlain Square – the first building in the city’s iconic Paradise development. In fact, Birmingham has secured more than one million sq ft of pre-let office space since the beginning of 2017. And with office rental space still far less expensive than the Capital, that only looks set to continue.
Following this, the city also secured another coup on a global scale – to host the Commonwealth Games in 2022, and there are more than just whispers that Channel 4 could be encouraged to move to Birmingham.
The knock-on effect is being felt in Birmingham’s housing market – and compared to the UK’s Capital city, it’s very good news.
Here is a list of four times Birmingham beats London for property buyers:
- House prices growing four times faster
According to Hometrack’s UK Cities House Price Index -December 2017, London’s capital growth YoY equated to just 1.8%, compared to Birmingham’s chart-topping growth of 7.5% (the highest in England). This means anyone who has bought in the last year has cause to celebrate.
- House prices three times cheaper
Birmingham house prices average circa £187,000 against London’s overall average price of over £615,000 (source: Rightmove), which means there’s still plenty of room to grow further. With Birmingham taking the top spot for inward investment and population growth for regional cities in the UK, there’s every chance house prices in the second city will continue this upward spiral.
- Four times the space for your money
In city centre terms, Birmingham’s average house price will buy you a brand new spacious one bedroom apartment with parking space in a prime spot in Birmingham city centre.
In London, the same spend will buy you a parking space in a prime spot in central London, or a tiny, well lived in studio apartment without parking and only 16 years left on its lease – which will cost you upwards of £20,000 to renew for a longer term once it runs out.
As a landlord, this means in Birmingham, you have opportunity for two rental incomes – one for the apartment, and one for the parking space. In London you have one, which is likely to become less favourable to the tenant in the long-term.
And for those who can’t afford to buy yet, you can rent a two-bedroom apartment for £950 with parking in prime Birmingham city centre, or rent one room in a shared apartment or a tiny bedsit in central London, without parking. It’s your choice…
- Closer to all major cities
Sitting at the heart of England, Birmingham is the most accessible city in the UK. All major cities are reachable within less than four hours, with the Capital set to be reachable in under one hour once HS2 launches in 2026. Meanwhile, unless you fly, which takes time with check in and check out, it can take up to double the time to reach cities in the North and West of the UK.
If all of that isn’t enough, here’s four more reasons Birmingham residential property will continue to flourish over the next few years:
Whilst London put on a spectacular display for the 2012 Olympics, 10 years on it will be time for Birmingham to shine, as host of one of the world’s most recognisable sporting events. The projected overall cost of the Games is expected to reach £750m, with the government covering around £560m of that figure and the local council contributing £190m. Overall the arrival of the Games will speed up numerous regeneration projects across the city, and it’s predicted this could add around £1.1 billion to the UK’s economy.
Transport, connectivity and HS2
Birmingham will be the central hub of the highly anticipated HS2 project, adding unrivalled interconnectivity between the North and South regions. The government-commissioned report by accountants KPMG states that the West Midlands is set to win from the project:
“The West Midlands will gain most in absolute terms with a rise of £1.5bn-£3.1bn in output in 2037. The East Midlands will gain most in percentage terms – between 2.2% and 4.3% increase in output in 2037.”
With ‘big four’ businesses such as PwC moving into major new headquarters in the city centre, along with HSBC and HMRC, they bring with them thousands of new jobs, including workers relocating from London. This in turn accelerates demand for city living, which in turn pushes up property prices.
Fastest improving city
Last year, Birmingham was named fastest improving city in the UK in which to live and work, which is no surprise with all the recent investment and development the city has attracted. With Birmingham on its upwards cycle of being one of the top cities to invest, live and work, and a host of future development plans in the pipeline, there is no sign of the city slowing down any time soon.
Andy Foote, director at SevenCapital commented: “Birmingham really is booming at the moment. For property buyers, it’s a great time to be entering the market whilst it’s on an upwards spiral and has much potential to grow further over the coming years.
“London has historically ruled so many markets, but now it’s the second city’s time to shine.”
For more information head to SevenCapital.com