birmingham night skyline

Birmingham housing market set to strengthen in five-year forecast

With regional city centres predicted to buck house price trends over the coming years, the Birmingham housing market stands out as a promising investment location.

The West Midlands city of Birmingham has seen some big changes of late, with huge levels of investment and redevelopment spurred on by the Commonwealth Games, the promise of HS2 and the city’s rising status as the country’s ‘second city’ after London.

While London’s property market has struggled the most in recent years in terms of house price growth, Birmingham’s housing sector has been thriving. And the latest predictions point towards more of the same over the next five years.

Wider house price predictions point towards a slight fall – which many mark as a correction after unprecedented growth over the past two years – honing in on individual cities in particular paints a very different and decidedly more optimistic picture.

Birmingham housing sector will outperform

According to the latest Q4 2022 house price forecast from JLL, Birmingham’s housing market is set to see house price growth of a cumulative 19.2% between 2023 and 2027. This far exceeds the expected UK average of 8.9% over the five-year period.

While much of the market is expected to dip in 2023 in terms of house prices, Birmingham’s housing sector is still set to grow next year, albeit by just 1%. This will be followed by 2% in 2024, 4% in 2025, 4.5% in 2026 and 6.5% in 2027, says JLL.

This equates to average house price growth of 3.6% per year over the next five years, which is matched only by Manchester – which is also expected to see slightly higher cumulative house price growth 0f 19.3%.

Demand across the Birmingham housing market from both owner-occupiers and property investors – off the back of heightened appetite among tenants – is continuing to climb, which is boosting the property market there. There remains a shortage of properties to meet this demand.

What about the rental market?

For property investors and landlords considering the Birmingham housing sector, the city’s rental market is also forecast to grow over the next five years, according to JLL.

Again second only to Manchester, which is due to see rental prices rise by a cumulative 4% between 2023 and 2027, Birmingham’s rental sector is predicted to see prices grow by 3.6%.

In a reversal of the house price predictions, the pattern in the rental market is one of a slight slowdown in growth over the coming years, based on a range of factors including the new housing pipeline and an expected improvement in the ability of renters to get onto the housing ladder.

This breaks down as 5% growth in 2023, 4% in 2024, 3.5% in 2025, 3% in 2026 and 2.5% in 2027. So landlords can still expect extremely healthy returns if they remain in the market in the coming years through rental income, as well as through capital appreciation.

Jobs boosting housing need

Employment prospects in Birmingham have surged in recent years as more and more small, medium and large companies have relocated or opened offices there, which has also boosted demand on the Birmingham housing market.

Birmingham was recently named as the top city in England for job opportunities in the financial sector, after London. According to a report by UK trading company CMC Markets, employment prospects in the city have been soaring in recent years, attracting increasing numbers of graduates.

The study found that Birmingham is home to 265 financial institutions. While all of the bases currently are small or mid-sized, with no more than around 250 people per office, this is set to change with the arrival of the new Goldman Sachs office – and many more.

Nearby in Solihull – another area that is currently the target of some major regeneration thanks to the planned HS2 station there – there is also a high proportion of banking companies and jobs there in comparison to the local population; a further sign of levelling up.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

aerial-view-uk-houses

STAY AHEAD OF THE MARKET

Sign-up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
UK holiday let

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT