Whether you are a homebuyer or an investor, it is always important to know where the best markets are and what makes them so special. Birmingham, the UK’s second city, is one of the strongest prospects in the country and has a wealth of appeal for both types of people looking to purchase property.
A major indication of a good property market is a booming local economy. On this count, Birmingham delivers everything you could want.
The 2022 UK Powerhouse Report from Irwin Mitchell and the Centre for Economics and Business Research (CEBR) shows that annual growth of 2.3% is anticipated each year going forward following 6.9% growth in 2022 which demonstrated how fast the city is recovering from the COVID-19 pandemic.
If this is accurate, it is expected to bring major benefits to Birmingham, including an additional £1bn GAV a year and 24,000 new jobs by the end of 2023.
The latest City Tracker from the same source brings further good economic news. With 1.1% growth anticipated in Q4 of this year alone, we are looking at an overall increase in employment of 1.4% over the course of 2023, for a total of 613,800 employed in Birmingham.
What’s more, a huge number of these jobs are in the most sought-after, modern industries including financial services where Goldman Sachs, Pricewaterhouse Coopers and HSBC maintain major headquarters in the city.
What makes Birmingham so attractive to these companies and others like them? One reason is a fast-growing population which expanded by 6.7% over the last Census period to a total of more than 1.14 million.
Additional growth of 7.8% by 2038 has been predicted on top of that by Birmingham Demographic. This is a large workforce and it creates opportunities, bringing in big multinational companies and contributing to a vibrant start-up economy. In turn, these attract more and more people to the city – many of whom attend the city’s three main universities and stay in the city after their studies. This makes Birmingham more diverse and helps it retain the highly qualified skills base that is putting it in the top rank of cities in the UK, and on the map internationally.
The University of Birmingham, Birmingham City University and Aston University together bring tens of thousands of students to the city each year, contribute billions of pounds to the local economy and support a huge proportion of the best jobs in the city.
For example, the University of Birmingham say: “The impact of the University’s spending and that of our students is worth £678.8m per year to Birmingham’s economy and £951.8m per year to the West Midlands.
“Our teaching contributes £1.34bn to the economy and we are a net importer of talent; 24% of our students come from the West Midlands and almost 48% of our students stay in the region after graduation.”
With the great jobs on offer, easy rail links to London and Manchester, and the nearby Birmingham International Airport offering convenient access to the rest of the world, it is no surprise that half of graduates each year stay in the city following their studies.
However, Birmingham is also the most popular destination in the country for people leaving London and migrating to other cities. Aside from everything said above, Birmingham is also an outstanding place to live in its own right.
It is one of the UK’s most exciting, historic and diverse cities, with world-class restaurants, museums, galleries, high end retail, entertainment venues and so much more round every corner.
For example, it is home to the National Indoor Arena, the Symphony Hall and a range of other music venues and annual festivals. It is also one of the country’s most visited shopping locations, and the main shopping centre – the Bullring – can be found in the heart of the city centre, while other centres including the Mailbox and Grand Central add to the mix alongside the independents found in the popular Jewellery Quarter and Digbeth area
It is also an exceptionally green city, surrounded by country parks, and is criss-crossed with beautiful canals which give the city a refreshing atmosphere and a character all of its own.
Most importantly, Birmingham continues to invest in its own future and will continue getting even better in the future. The city region is creating six special investment zones which have the potential to add £4.7bn to the regional economy, create more than 65,000 new jobs and add 3.1m sqm of commercial space for business use.
It is also a 5G test hotbed, giving it a major competitive advantage, and its transport infrastructure has received major boosts with the upgraded bus network, the ongoing improvements at the airport and the building of HS2 which will slash journey times to London and Manchester when complete.
Everything about Birmingham is growing and improving in real time. As per the above data, more people than ever before are moving to the city, and this is having a major effect on its property market. Put simply, there are nowhere near enough homes in the city to meet demand.
The latest Birmingham Crane Survey from Deloitte lays out the scale of the issue. The survey notes that 2022 was a record-breaking year for new housing in Birmingham as 2,398 homes were completed and brought to market. On top of that, the number of new schemes in progress has increased by 37% in a year.
However, even this strong effort is not enough as figures from JLL show that at least 4,000 new homes are needed in the city itself each year, and the wider Birmingham region has committed to building 215,000 new dwellings by 2031.
Clearly this is going to be almost impossible to meet at the current rate of building, and this opens up an opportunity for anyone buying property in Birmingham to accrue significant capital appreciation if they buy now. The latest UK House Price Index from Hometrack shows that property values in Birmingham went up by 6.1% in the last year despite economic uncertainty, and forecasts from JLL show that demand could lead to property price growth as high as 27% by the end of 2026, and rental growth of 14.8% over the same period.
This is a great time to look at Birmingham for both homebuyers and investors. Want to buy property in Birmingham? Find out more about our latest project in the city by clicking here.