Birmingham’s population is expected to grow by roughly 31.7%, by 2031. This is predicted to bring with it an increase in the demand for new properties and homes. Landlords, investors and developers appear to be aware of the prospective growth and are already taking advantage of it.
The average value of Birmingham-situated residential properties has increased over the last five years by around 31%. Hometrack has predicted prices of property will continue to increase by another 20 to 30% over the course of the following 3 to 4 years as vast improvements are made to the area.
The major target is unlocking the city’s potential and The Big City plan has established a 20 year vision into completely changing the area. Working alongside with these plans, the West Midlands Combined Authority are strategically planning infrastructure, commercial space and housing using the largest investment fund in the county for the combined amount of £1.1 billion.
Infrastructure Improvements
The busiest station outside of the capital is Birmingham New Street. This benefited the city greatly city with increased passenger capacities and reduced travel times. As the Metro network has received additional investment, it has opened up brand new development areas and focuses on the future plans for Birmingham. This is crucial as increased and continuous investment in this particular network can help the city and its surrounding areas to continue growing.
Furthermore, it is easier and quicker to commute to and from the capita and with the HS2 line, will increase the appeal of the city as an important home of business and commerce, by shortening travel times to and from the capital right down to 49 minutes. This means that the city is more open to people coming from all over Europe.
Businesses and Workers Are Moving Into The City
The number of square feet offices have taken up in Birmingham over the last year has tipped over the 1 million mark, which puts it at 51% over the average for the last 10 years and large number of big companies have relocated from the capital to Birmingham, with many more set to follow suit.
In Birmingham, Deutche Bank recently opened a large office staffed by over 2,000 employees and HSBC are also preparing to move over 1,000 of its workforce to Birmingham from the capital. In a report released by Savills, businesses are making an average saving per member of staff when they move them from London to Birmingham of around £10,000 for property and £10,000 for the employee.
As businesses move, this means that workers will also move and as Birmingham has one of Europe’s youngest populations – 40% of the population are under 25s and 49% of graduates that attend universities in the local area live in Birmingham too. For investors and developers this is a very important factor to consider when deciding which kind of property would garner most interest in Birmingham and the surrounding areas.
Development Of Residential Property
There are approximately 21,200 residential developments either being planned or currently being constructed across Birmingham. This development is fully supported by the brownfield potential and the robust price growth in the city. One thing to keep in mind though is that the kinds of properties are diversifying and changing, with the market for build to rent properties being the most profitable. It is thought that there are at least 1,800 units being constructed for BTR properties.
Some of the major house construction firms and businesses that want to develop outside of London are rushing to Birmingham, alongside property investors. They are not targeting just one area of the market either, with affordable stock and high-end complexes all on their agendas. Through it all though, there is a real concentration on looking for the returns they can gain over a longer period of time rather than a shorter term. This is similar to what happened in areas of the London property market. However, one thing you can be sure of is that as the population continues to increase, so too will the need for more houses.
Overall, the West Midlands looks likely to achieve a five-year residential sector growth of 14.8%. That is according to Savills research. As the growth in this area is predicted to be rather subdued throughout 2018 though, there’s still time to look at investing in Birmingham as it is on the edge of an incredible growth spurt in the very near future.
