Is Now a Good Time to Buy a House in Birmingham?

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Is Now a Good Time to Buy a House in Birmingham?
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Buying a home is the most significant financial investment many people will ever experience. This monumental decision entails years of diligent saving, dedication of time and resources, and navigating the challenge of determining the ideal location to call home. It’s not always feasible to reside in our preferred locations, so it’s essential to explore alternative areas that offer affordability and an exceptional quality of life.

One area that has attracted a lot of outside interest in recent years is Birmingham, due to hosting the 2022 Commonwealth Games, a renowned television series that catapulted it to the pinnacle of trendiness, and an abundance of attractions. These include picturesque canals, verdant suburbs, a diverse array of events, five Michelin-starred restaurants, vibrant bars and breweries, and a flourishing bohemian scene.

But what is the housing market looking like in Birmingham in 2023, and is now a good time to invest in property there? Should you be using cash house buying services like We Buy Any Home to free up cash with a sell house fast service and investing here?

Are house prices dropping in Birmingham?

In short, no. Birmingham’s housing market has shown signs of steady growth rather than a decline. In 2022 the overall average price of properties in the city was £264,111 which compared to the previous year represents a 4% rise and an 11% increase from the 2020 peak. Thus, Birmingham house prices are not currently dropping, but rather experiencing an upward trend.

With this in mind, let’s try and answer the million-dollar question for investors, which is…

Will house prices go up in Birmingham?

The outlook is good. Birmingham boasts an impressive forecasted house growth rate, with JLL predicting a 9.3% increase in house prices in the West Midlands region between 2023-2027. This outpaces the UK average of 8.9%. Specifically, Birmingham property values are anticipated to rise by 19% over the next five years, which is a big jump in struggling economic circumstances.

Furthermore, the high demand for rental properties is expected to persist in 2023, as the current cost of living squeeze and higher mortgage rates could cause potential homeowners to postpone their first home purchase. JLL forecasts a 5% rental growth in Birmingham city centre for 2023, surpassing other cities like Leeds (3.5%) and Bristol (4%).

Over the 12 months leading up to December 2022, Birmingham rents experienced an average increase of 15.8%. The report further projects an average rent hike of 19.3% between 2023 and 2027, solidifying Birmingham’s potential as an excellent property investment choice.

Is it a good investment to buy a house in Birmingham?

Birmingham is experiencing significant transformation, with ongoing regeneration projects reshaping the cityscape. As one of the most popular investment destinations in Europe, Birmingham attracts billions in retail, infrastructure, residential, and commercial ventures. Such projects make the city increasingly appealing to live in, driving up property and rental values, and offering attractive prospects for landlords and investors.

Some key developments, both completed and underway, include:

  1. 103 Colmore Row Tower: The tallest new office building outside London, this 26-storey structure features Grade A office space, restaurants, unmatched 360-degree city views, and a 4-storey winter garden. Located near New Street and Snow Hill stations, it offers easy access to London by train and connects to the city via the extended Metro.
  2. Paradise City Redevelopment Project: With a £700 million investment, this mixed-use development comprises office, residential, and commercial spaces, featuring 10 new buildings, 3 public squares, and a hub for events, restaurants, and cafes.
  3. Birmingham Smithfield: This £1.5 billion project aims to develop the area south of the city into a vibrant urban quarter. It includes a new location for Birmingham’s historic Bull Ring Markets, leisure, and cultural facilities, and over 2,000 homes surrounding a new public square.

Given these ongoing developments and the city’s increasing appeal, investing in Birmingham property seems to be a promising opportunity.

There is also the city’s student population to consider. Birmingham has five universities: Aston, Birmingham City University, the University of Birmingham, University College Birmingham, and Newman University College. Since 2018 the number of students in Birmingham rose by 10%, leading to a surge in demand for student accommodations. It is estimated that around 6,000 additional beds will be required by the 2025-26 academic year which presents an excellent opportunity for investing in student properties. The existing number of students outpaces available beds, making student housing a significant part of Birmingham’s rental market.

Furthermore, the city’s graduate retention rate is 41% today—the fourth-highest rate in the UK. As a large number of students choose to stay in Birmingham post graduation, landlords can capitalise on a consistent flow of renters, including young professionals seeking accommodations. The growing student population serves as another compelling reason to invest in Birmingham’s property market.

What is the outlook for the property market in Birmingham?

As Birmingham continues to experience a surge in businesses, job opportunities, and high net-worth investments, the demand for suitable housing for incoming workers is on the rise. Investing in Birmingham property allows you to cater to city-dwelling young professionals, an attractive rental demographic for landlords.

Given the city’s increasing popularity and promising economic outlook, Birmingham’s real estate investment properties are expected to yield good returns and appreciate in the coming years. As one of the UK’s most sought-after cities undergoing extensive regeneration and investment, Birmingham is bolstered by a strong student population and a growing young professional rental market, making it an ideal location for property investment. With rents and property values projected to increase by 2027, ample opportunities abound for investors in Birmingham’s property market.

If you want to get in on the action, you’ll probably need to sell your current property to do so. At We Buy Any Home, our sell house fast service offers numerous benefits, with the standout feature being its speed. This enables us to customise our offerings to match our clients’ preferred schedules, so you do not need to spend 9 months selling on the open market and incurring fees on top. Give us a call for a no obligation quote on your property and you could be buying a new property in Birmingham in no time at all. 

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