Ever since inflation took hold across the country, the housing market has suffered in terms of demand. This is because, in an effort to control inflation, the government increased interest rates, which whilst good for savers, is not good for borrowers and those looking for a mortgage. Gone are the days of 2% or even 1% mortgages. Today, a base rate mortgage sits at 5.35%, with fixes in the 5% range too.
So what does this mean for Birmingham’s property market? Is there still high demand or has it also felt the effects?
Is now a good time to buy a house in Birmingham?
The housing market in Birmingham is on a roll – in fact it saw the most home sales in the whole of the UK at the start of this year.
Across the UK, there were fewer homes sold at the beginning of this year compared to the start of last year. A report using figures from the Land Registry shows that there were 76,489 homes sold during this time, which is 58% less than last year. That’s a huge drop.
This drop was somewhat expected because the end of 2022 was a bit rocky for the housing market. Also, there was a big rush to buy homes last year because of a special tax break from the government (stamp duty pause), which isn’t happening this year.
Despite this national trend, some places are doing better than others. Birmingham is one of those places – it had 1,070 homes sold, which is the highest number for any place in the UK.
Are property prices falling in Birmingham?
To put it simply, the city’s property prices have been climbing steadily. The average price for homes in Birmingham hit £264,111 in 2022. This marks a 4% increase compared to the year before and an impressive 11% jump from the top prices in 2020. So, the trend for house prices in Birmingham is one that is growing not shrinking like in most other places in the UK. So good news if you are trying to sell to cash house buyers or via traditional routes.
Is Birmingham a buyer’s or seller’s market?
In most parts of the country, we’re seeing a buyer’s market, with diminished demand for homes due largely to higher mortgage rates. In fact, in 2023, about 80% of homes on the market are selling for less than their listed valuation, placing the power in the hands of buyers to drive down prices.
However, Birmingham is defying this trend and is experiencing fierce competition in its housing sector meaning the city is more of a seller’s market. There’s a strong pool of buyers in Birmingham, presenting opportunities for sellers to potentially boost their asking prices and maximize profits. As a result, those looking to sell in Birmingham are in a favourable position compared to sellers in many other regions.
What are the predictions for the Birmingham property?
Prospects for the Birmingham housing market appear strong. Experts at JLL are forecasting a 9.3% increase for the West Midlands area over the period from 2023 to 2027, surpassing the predicted UK-wide average growth of 8.9%. Birmingham, in particular, is anticipated to experience a substantial 19% surge in property values within the next half-decade, standing out even in challenging economic times.
Additionally, the rental market in Birmingham is likely to remain strong into 2024, with the combination of the current cost-of-living challenges and high mortgage rates potentially delaying many first-time home purchases. JLL’s predictions suggest Birmingham’s city centre could see rental prices climb ahead of other prominent cities such as Leeds and Bristol.
Looking forward, rents are expected to jump by an average of 19.3% from 2023 to 2027, presenting Birmingham as a strong contender for property investment.
Does buying a property in Birmingham make for a wise investment?
If the city is judged to be growing, like Birmingham, the chances are property prices will grow too. Thanks to regeneration across the city, more and more students attracted by its universities and its sports teams flourishing, Birmingham is drawing substantial investment into its retail, infrastructure, residential, and commercial sectors which may create lucrative opportunities for property owners and investors looking to get a step on the ladder before prices rise too much.
Will Birmingham get bigger?
Yes – in every sense. The population is due to increase to 1.24m by 20230, up from 1.16m today. This marks a substantial growth of around 10% from 2011!
The city is not only growing but is also increasingly becoming a preferred alternative to London for many. In fact, the trend of people relocating from London to Birmingham is gaining momentum. In 2018, 18,000 people chose Birmingham over London, and this figure is set to rise as the cost of living bites.
Birmingham’s allure is not just in its regeneration but also in the quality of life it offers. Its affordability combined with a plethora of new cultural and social venues explains why more people are choosing to call it home, especially the younger crowd. With over 100,000 young professionals and almost 40% of the city’s population under the age of 25, Birmingham is vibrant with youth and potential.
The city’s development is poised for further acceleration with plans like the ‘Our Future City Plan,’ aiming to revolutionize Birmingham into a city of close-knit, vibrant neighbourhoods, which will appeal to families and young professionals.
Given the expected rise in both rental rates and property values by 2027, Birmingham stands out as an attractive hub for investors.
How We Buy Any Home can help
For those interested in selling property in Birmingham to investors, We Buy Any Home can offer a cash buying service like no other. Our quick sale approach is designed to work to your timelines, bypassing the prolonged and often costly process of selling on the open market. For a hassle-free, no-obligation valuation of your property, reach out to us today and we could take your Birmingham property off your hands regardless of its condition, if you are in arrears, if you are selling up after a divorce or have tenants in situ.