Priced-Out Londoners invest in Birmingham’s Bargains
Property investors in London are seeking bargains in the regions, particularly Birmingham where two apartments can be bought for the price of one in the capital.
Birmingham’s profile as a property investment hotspot has increased dramatically, confirmed in a recent report by PwC and the Urban Land Institute which says the West Midlands city is set to overtake London as the most attractive city for property investment over the next 12 months.
According to Knight Frank’s Birmingham Report, there will be 18,500 new households in the city by 2019, with the rate of supply likely to fall short of demand by some 2,000 homes, which will inevitably push up prices.
Property in Birmingham has risen 8.27% in value over the past two years, according to data from Zoopla although it is still possible to buy a three-bedroom town house in the now fashionable Jewellery Quarter for around £250,000.
Major Mahil, director of Birmingham estate agents Belvoir said: " We are finding that lots of investors from London are looking here because they’ve been priced out of the market in the capital. We’ve had people buying up blind. There’s a real feeling of buoyancy ".
Birmingham’s central location in England is fast-expanding as a transportation hub, from where you can reach almost any part of the country. The internationally famous brand John Lewis is on the verge of opening its second-biggest store in the UK above New Street Station in the City’s centre which itself has been completely revamped.
HSBC has announced its decision to build new headquarters in Birmingham City for its retail and commercial banking business, moving 1,000 jobs from London by mid-2017; Deutsche Bank is also setting up shop in the city. As the influx of retail giants and international financial institutions in the city gathers pace, demand for homes in the district is increasing exponentially.
Property investment will be further boosted by the arrival of high-speed rail HS2, set to reduce the train journey times between Birmingham and London to a mere 49 minutes. There are several reasons Birmingham is under the investor microscope in 2015 and further significant growth is anticipated.
Birmingham’s buy-to-let market has expanded on the back of improving dynamics in the City. Ray Withers, chief executive of leading property investment specialists Property Frontiers said: " The UK’s second-tier cities such as Birmingham have created an excellent environment for buy-to-let investors. Rising prices have created the opportunity for capital growth, while the potential for healthy yields has led to the right developments selling out fast ".
With a population of 1.1 million and an average age of just over 35, Birmingham has plenty of professionals looking for rental accommodation. It is a busy, vibrant city and home to some of the UK’s leading companies, set to expand significantly as more international businesses enter Birmingham’s real estate arena in the coming years.
Birmingham is also subject to a £500m regeneration programme recently unveiled by the government – a project that includes 100,000m 2 of retail space, 1,000 new homes and a metro tramline.
First time buyers are on the rise in Birmingham, particularly in popular suburbs like Harborne. Andy Thomas of Hunters’ Harborne branch said: " I was born and bred here and the quality of life is one of the incentives for people coming to Birmingham. If you go five miles from Harborne, you can be in lovely countryside ".
Investors from the capital have been attracted to Birmingham’s real estate largely because of price disparity presenting better opportunities for solid capital growth and high rental yields, particularly in comparison with London prices.
Daniella Willets, manager of estate agents Connells reports that 60% of flats in Birmingham City centre are being bought by London investors. " They are finding that they can buy two flats for the price of one in London and the yields are better too, " she said.
Article by +Roxanne James on behalf of Propertyshowrooms.com
