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Top investment locations in Birmingham revealed

As the UK’s largest city outside London, and one of the youngest in Europe, Birmingham has received significant attention over recent months.

The city continues to enjoy unprecedented levels of investment and regeneration. With the recent announcement that HS2 will in fact go ahead, which will provide a further boost to the city and wider region, Birmingham is fast becoming a popular place to live and invest in.

Birmingham-based developer SevenCapital has lifted the lid on how the city’s residential market is performing to identify the top seven places to invest in property in the city.

From key suburbs to prime city-centre postcode, the list shows the Birmingham hotspots ranked according to growth potential, taking account of current and future demand, affordability and price growth.

Digbeth tops the list for 2020 due to its future potential over current statistics. Andy Foote, director at SevenCapital, comments: “Whilst the more established central ‘hotspots’ such as the Jewellery Quarter, Edgbaston and Harborne benefit from higher average house prices and marginally higher growth over the past 10 years, there is significantly more space for future growth and regeneration in Digbeth, which is exactly what is planned for the area.”

“Couple that with its lower entry point for buyers and investors, prospects for returns in the future for those who buy now, ahead of the area reaching its anticipated potential look very positive.”

Digbeth is known as the creative heart of Birmingham and is within walking distance of HS2’s Curzon Street Station, the existing Moor Street and New Street stations, the main city shopping area and the hearty of the city’s emerging Creative Quarter.

It’s also been dubbed the ‘coolest place to live in the UK’ by The Times and is subject to more than £2 billion of planned development projects over the coming years, including the Birmingham Smithfield masterplan and the long-awaited Connaught Square development.

Foote says the city has already undergone a transformation over the past 10 years, with ongoing, significant development projects – including Paradise, Arena Central and the tram network – making Birmingham an even more attractive place to combine business, work and home life.

“Global organisations such as HSBC and PwC have already recently rehomed key headquarter operations or increased their head counts within the city’s newest developments, bringing thousands of jobs,” he says.

With HS2 and the 2022 Commonwealth Games amongst many other key projects still in the pipeline, the city’s population is expected, as a knock-on effect, to hit 1.3 million by 2039, vastly increasing the demand for available homes.

One area of interest for Foote is Selly Oak. Renowned across the city as a student suburb, prices here are towards the higher end of the scale, with rental yields at a steady 4%. Demand here, as long as the University of Birmingham and the Queen Elizabeth Hospital remain, will always be high. However, this area is mostly suitable for those who specifically wish to become a student landlord and are comfortable with the short-term tenant market.

Foote concludes: “Overall, Birmingham has begun to shine out on a global stage over the past decade, but with recent and future developments, the best is yet to come for the city, so for residential property buyers, there has never been a better time to invest.”

The top buy-to-let property hotspots in Birmingham 2020 are listed below:

Area

Current av. Price

Av. rental yield

Growth past 10 years

Growth potential

Digbeth

£189,400

4.7%

38.04%

High

City-Core

£200,300

4.7%

37.77%

High

Jewellery Quarter

£212,300

4%

39.26%

Medium

Selly Oak

£344,800

4%

38.51%

Medium

Erdington

£173,438

5%

25.79%

Medium - High

Harborne

£362,574

4.8%

39%

Medium

Edgbaston

£295,700

4.1%

39.04%

Medium

For further analysis and information on the best areas to invest in Birmingham, click here.

Recently, Property Investor Today looked at the major new Birmingham project from Moda Living and the latest update on a popular development scheme.

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