The property market in some areas is cooling rapidly, but regional city centres such as Birmingham are expected to buck the trend of falling house prices over the next five years.
Experts are predicting that smarter investors will be booking a home buyers survey Birmingham as they look to cash in on what is being billed as a promising area for property investments.
As clients of companies such as Sam Conveyancing already know, Birmingham has a lot to offer buyers. The West Midlands city has experienced some major changes in recent times as huge levels of redevelopment and investment have been prompted by the Commonwealth games, the rising feeling that the city is a worthy second major location after London, and the promised HS2 link. You can read more about the latter on the HS2 website .
London is seeing property prices struggle when it comes to growth but the Birmingham housing sector has defied this trend in favour of a thriving period. Experts are predicting that this will continue over the next half-decade.
Predictions for the wider housing market are centred on a small fall, probably due to a natural correction after the unprecedented growth seen in the last two years, but there is a much more optimistic picture for Birmingham and other cities.
Birmingham set to outperform
JLL Q4 figures for 2022 indicate that Birmingham looks set to experience cumulative house price growth of around 19.2 percent from 2023 to 2027. The expected average for the UK is just 8.9 per cent in the same period.
The housing sector in England’s ‘second city’ is only expected to grow by one per cent in 2023, but this contrasts with falling predictions for a large proportion of the market. Birmingham also looks set to see price growth of 2 per cent in 2024, followed by expected annual growth figures of four per cent, 4.5 per cent, and 6.5 per cent. This means an average growth of 3.6 per cent a year in the next half-decade.
This price growth average is only matched by the city of Manchester, where experts are predicting a cumulative price growth of around 19.3 per cent.
Property investors are also being drawn to Birmingham because of the opportunities offered by an overstretched rental market. Demand from tenants continues to outstrip supply and this is boosting the buy to let market.
JLL is predicting that rental demand will also grow in the years to 2027. The rental sector in Birmingham is predicted to experience a cumulative rental price increase of 3.6 per cent. This is second only to Manchester where prices are expected to rise by 4 per cent.
This does mark a slight growth slowdown compared to recent times. This is likely to be due to more renters being able to buy and new housing pipeline changes.
The five-year predicted annual growth figures from JLL are five per cent in 2023, followed by four per cent, 3.5 per cent, three per cent, and 2.5 per cent. This still promises healthy returns for investors, both in terms of capital gains and rental income.
Another positive factor is the employment prospects in the city, which have risen significantly as businesses of all sizes relocate or open locations.