There are opportunities aplenty in the Birmingham property market, supported by a growing local economy, buoyant employment market and increased spending on infrastructure improvements. One up-and-coming area which has caught the attention of many property investors is Digbeth in one of the more creative areas of Birmingham city centre. The fact that property prices have increased by 401% in Digbeth over the last 20 years, and a staggering 38% over the last 12 months, says everything. So, why are investors so interested in Digbeth?
Work, life balance and Digbeth
This is an area of Birmingham which is central to not only employment opportunities but also a vibrant social life. As with many major cities in the North and Midlands of England, local authorities have invested millions of pounds in massive regeneration projects in recent times. This has created a new feel, a new outlook and new opportunities for Digbeth.
You are literally just a hop skip and a jump away from Birmingham city centre, the famous bullring shopping centre, the Custard Factory and new street station. As a consequence, those looking at buy to let opportunities can secure gross rental yields up to 6% on new builds.
Universities and constant flow of tenants
If you look at some of the more buoyant property markets around the UK many of them have high quality education facilities. Birmingham is no different with a reputation for hosting some of the best universities in the UK. For those looking at buy to let opportunities this is the Holy Grail, a strong flow of prospective university tenants attracted by an active nightlife and growing employment opportunities.
Evidence also shows that many students who graduate from universities in Birmingham do have a tendency to stay in the region as they seek long term employment. As a consequence, many students may stay long-term in their rental accommodation and there will also be a constant flow of new graduates looking to put down roots.
Relocation from London
It has been interesting to see Brexit concerns hitting the London property market to a far greater extent than the rest of the UK. Granted, London has benefited more than most from recent property price increases but this has prompted many to cash in their “London premium”. In 2016 the Office for National Statistics confirmed that Birmingham was the top choice for the majority of people leaving London. Recent evidence has confirmed more people than ever before are leaving the capital and with regeneration, including new accommodation facilities, retail and social outlets, surely the draw to Birmingham from London can only strengthen?
As the regeneration of Birmingham’s city centre continues this has led to a buoyant employment market. Places such as Digbeth are attracting young, highly skilled and affluent renters in growing numbers. It is the opportunity to create that perfect work/life balance in accommodation literally in the city centre and central to an array of facilities which is turning heads. When the government finally gets around to building HS2 this can only improve the prospects for area such as Digbeth.
This buoyant property market, with strong demand for rental accommodation, offers the perfect environment for buy to let investors looking at long-term opportunities. Gross rental yields approaching 6% are available with some of the new developments in Digbeth. This compares favourably to current savings rates while also offering potential for long-term capital growth – a perfect mix for many investors.