For the third year in a row,places Birmingham top in the UK for property investment prospects. Dubbed the 'Workshop of the World' a century and a half ago, Birmingham has a strong pedigree as an entrepreneurial hub.
Fast forward to the present, and although Birmingham has changed immeasurably, Britain’s Second City still seems to possess that all-important pull factor. It’s the type of place that appeals to entrepreneurs, professionals and investors alike.
Geographically, Birmingham is positioned at the centre of things; a factor that helps to explain the city’s success. Of itself,, while its location means that 90% of the UK’s population is within four hours’ reach. Over 75,000 companies are based in the city, including 1,190 international firms; including Jaguar Land Rover, Deutsche Bank and Mondelez International to name just a few.
City centre appeal
Evidence suggests that Birmingham’s pull factor is actually getting stronger. Regeneration is making the city centre an ever-more attractive place to live, visit and do business in; while exciting new transport links are set to make Birmingham even better connected. Alongside this (and spurred on by it) there’s a growing population and a shortage of new homes to keep up with demand.
Over 30,000 new homes are needed by 2031 to meet projected demand and construction needs to start accelerating to have any real chance of meeting this. Only one major residential development started on site in 2015, while 2016 saw ten break ground – a significant uptick showing the property market begin to gather pace. The period between 2014 and 2016 saw Birmingham property prices grow by 11.4% and looking ahead,. High demand for rental accommodation also saw average rents increase by 3.2% in 2016, while further rental growth of 17.6% is forecast between 2017 and 2021.
With average city centre prices for 2-bed units at GBP250,000, Birmingham currently combines the twin benefits of strong medium to long-term growth potential and an accessible market.
So what exactly is driving Birmingham forward?
We’ve seen two important trends over the last few years: an impressive ongoing revamp of the city centre, coupled with ‘future-proofing’ of the city’s transport infrastructure.
, including 50,000 new jobs and 5,000 centrally located homes. Key central schemes include the GBP500 million Paradise development which incorporates , the new home of PwC’s 1,400 strong Birmingham workforce. According to PwC, the investment “reflects our commitment to our clients and people in Birmingham and our desire to offer them a truly first-class working environment”.
New office space sits alongside the new Grand Central shopping precinct, flagship stores (the new John Lewis being one example) to transform the city’s retail, food and leisure offering.
A key driver of Birmingham’s future growth is the upgrade of the UK’s national rail network.. The city is home to HS2’s construction headquarters, so between phase 1 which starts later this year and project completion in 2032, over 1,500 jobs will be created in the city. .
Between 2004 and 2014, the number of people living in the city increased by almost 100,000. The population continues to expand, with 12.2% more people expected to call Birmingham home between 2012 and 2032. This influx is driven not just by employment opportunities but also by the lifestyle on offer in what is an increasingly cosmopolitan city. Five universities ensure a steady stream of fresh talent and under-25s account for nearly 40% of the population, making it.
Sustainable development bodes well for the future
No European city is immune to market volatility. What’s important is whether a particular city’s fundamentals are strong enough to ride out any short-term storms triggered by Brexit or anything else that may be on the horizon.
As to the resilience of Birmingham’s market, a big clue can be found by looking at thein the first quarter of this year. What stands out is the diversity of sectors represented, from financial firms through to transport, healthcare and tech. Far from being Britain’s ‘back office’, the city is a hub in its own right.
Going on the, it’s the most entrepreneurial city outside of London; in 2016 there was a 37% increase in business start-ups while .
When a move of personnel is afoot for UK firms, Birmingham tends to be regarded as a natural choice - helping to make it the number one city for relocation from the capital. So whenwas required by the regulators to put clear blue water between its retail and investment banking divisions, the answer was obvious: move 1,000 key staff to Birmingham. .
It seems that Birmingham remains very much open for business; there’s a welcome commitment to regeneration – while its diverse economy suggests that it would take more than a single knock to send the city’s medium to long-term property market predictions significantly off course.
So can Birmingham meet your investment needs? To see how it compares to a wide range of opportunities across the globe, speak to IP Global today.