While Birmingham has four main universities – Aston University, Birmingham City University, Birmingham University and Newman University – there are also other further education/research facilities in the region. It will therefore come as no surprise that the student accommodation market in Birmingham is extremely strong. This is before we even begin to look at the prospects for the city and the region!
Growing student community
Across the numerous universities and further education facilities, there are sixty-five thousand students currently studying in Birmingham. The city has a population of around 1.1 million with official estimates suggesting 45.7% are under the age of thirty. As a consequence, Birmingham has been dubbed “Europe’s youngest city” with the student accommodation market set for further growth.
This growing demand should see house prices rise by around 20.5% between 2018 and 2022 with rental growth over the same period expected to be in the region of 16.5%. Another interesting fact about the student community is the phenomenal 49% graduate retention rate, meaning that nearly half of all graduates elect to remain in Birmingham to live and work after their course concludes.
Continuous demand for accommodation
At this moment in time Birmingham requires just over four thousand additional dwellings each year to keep up with general rental demand. As the student population continues to grow, and graduate retention remains high, this will feed demand for additional private rental properties. As a consequence, it is not surprising that property investors are extremely active in the city centre and surrounding areas.
There are few university cities which have such a prosperous economy and so many world-class education facilities. Perhaps the future key to the high retention of new graduates is the forecast 0.6% annual increase in employment between 2018 and 2022. While there are an array of new developments ongoing within the city centre and surrounding regions, many still expect strong upward pressure on rental valuations in the short to medium term.
There has been much discussion about the GBP56 billion High Speed 2 (HS2) rail project. Presently, Birmingham is within four hours travelling distance of all major cities in the UK and once the HS2 track is completed London will be reachable in less than an hour. The prospects for Birmingham keep getting better and better and with a twenty-year regeneration plan for the city centre it seems there is a lot more to come.
Most popular destination for those leaving London
Birmingham has for the last three years been the most popular destination for those leaving London. For many the decision is easy as they are moving from the relatively healthy London employment market to a similar situation in Birmingham at a fraction of the living costs. We also know that Birmingham has an extremely active entrepreneurial sector with more than seventeen thousand new businesses created in 2016.
Characterised by a thriving employment market, expanding infrastructure and growing student community, Birmingham offers residents and investors an enticing proposition. With more and more people selling London properties in the hopes of finding better value elsewhere, there has been a significant flow of capital entering the city which will likely continue. It is becoming very apparent that you don’t need to live and work in a capital city to prosper and Birmingham is an excellent example of the opportunities which exist elsewhere.