Posts with tag: Birmingham

Why Investors are Excited about Birmingham

Published On: September 14, 2017 at 8:52 am


Categories: Landlord News

Tags: ,,

By Matthew Tooth, Chief Commercial Officer, LendInvest

There are few things that Brits love talking about quite as much as house prices. It’s reflected in just how many house price indices we see published, virtually one a week each and every month. It’s easy to get distracted by the headline figures, but they never tell the whole story. Our housing market is really a collection of distinct regions, cities and towns, each going through their own, unique story.

Why Investors are Excited about Birmingham

Why Investors are Excited about Birmingham

Birmingham, the site of LendInvest’s latest Property Development Academy, is a perfect example of this. Time and again we heard from attendees of just how exciting the city is for property development currently, and why they are so desperate to get cracking with their own development projects.

It’s notable that in last year’s Emerging Trends in Real Estate report from PwC and the Urban Land Institute, which looked specifically at which European cities present the best opportunities for investors, Birmingham was the best performing UK city. It ranked 22nd, ahead of cities like Manchester, Edinburgh, London, Brussels and Rome.

This actually represented a worse performance than the previous year, when it ranked seventh, with the uncertainty around Brexit causing some investors to take a rather more cautious view, though the fundamentals of what makes Birmingham so appealing are still there.

As one person interviewed for the report said: “If you walk around in Manchester or Birmingham, you see a lot of young people on the street compared to other cities in Europe, so you feel a certain dynamism there and we like that.”

The presence of a host of universities adds to that appeal, bringing more young people to the city and delivering a steady stream of both undergraduate and graduate tenants.

That dynamic feel is making a difference to the city, to the point that it is a vastly different place today than ten years ago. There has been significant investment in infrastructure, with high quality, modern office buildings attracting large names to set up shop in Birmingham.

HSBC and Deutsche Bank have relocated their core functions to the city, while it has also proved attractive to technology and media firms. It’s an exciting place to work, and that can only boost the prospects of the housing market, both in the city itself but also in the commuter towns and villages around it.

All of this has led to a thriving rental sector. Our most recent Buy-to-Let Index found that the city currently boasts a rental yield of a very strong 5.03%, with capital gains of 4.97% over the last year.

And then there is the fact that there is still room for growth, certainly compared to cities like Manchester and London. The latest UK Economic Outlook report from PwC named the West Midlands as one of the housing hotspots, predicted to see house price growth of 4.5% this year, compared to a UK average of 3.7%.

Throw in the improved travel times between Birmingham and the capital as a result of HS2, and it’s clear that the city will continue to grab the eye of investors.

That’s not to say that there aren’t issues ahead. Brexit remains the great unknown; as PwC and the Urban Land Institute note, not only is the uncertainty pushing investors away from cities like Birmingham, but, if Brexit leads to a softening of prices in London, the “the appealing cheapness of secondary markets compared with the capital will diminish”.

And while transport between Birmingham and London will be improved by HS2, there is much work to be done when it comes to connecting our major non-London cities with each other.

Nonetheless, it’s easy to see why the would-be developers we met at the Property Development Academy were so enthused about building in Birmingham and across the Midlands. Irrespective of our status in the EU, it’s a city in a region that people want to live in and looks set to thrive in the coming years.

Birmingham leads way for UK house price growth

Published On: August 25, 2017 at 1:16 pm


Categories: Property News

Tags: ,,

The most recent Hometrack UK City House Price Index has revealed that Birmingham is Britain’s number one property hotspot. Prices in the city have risen faster than anywhere else in the country.

An average property in Birmingham rose in price by 8% in comparison to the corresponding month of last year- owning largely to substantial rise in transactions. Manchester and Nottingham came in second and third on the list for house price growth.

House Price Growth

On the other hand, Aberdeen has now been registering negative growth for the last two years. In more positive news, the yearly slowdown in London appears to have levelled out. Annual growth here now sits at 2.8%, up from 2.3% in June.

Across all of the UK’s main cities, annual house price growth now stands at 5.3%, in comparison to 7.4% in July 2016. The average price of a property in one of the 20 cities monitored by the Index is now £252,700 – higher than the UK average of £212,100.

The city level summary for July 2017 reads:

City Average price %yoy Jul-16 %yoy
Birmingham £155,400 6.8% 8.0% 1.2%
Manchester £157,500 7.3% 7.1% -0.1%
Nottingham £148,300 6.4% 6.9% 0.5%
Southampton £229,000 7.8% 6.5% -1.4%
Leeds £162,600 5.7% 6.2% 0.5%
Leicester £165,100 6.2% 5.8% -0.4%
Portsmouth £231,300 9.4% 5.7% -3.7%
Bournemouth £280,900 6.8% 5.4% -1.3%
Edinburgh £209,400 2.0% 5.4% 3.4%
Cardiff £198,900 5.4% 5.3% -0.2%
Glasgow £119,300 2.2% 5.2% 3.0%
Sheffield £133,900 2.8% 4.7% 1.9%
Bristol £268,400 14.3% 3.7% -10.7%
Belfast £129,500 4.1% 3.1% -1.0%
Liverpool £116,900 4.6% 2.8% -1.8%
London £494,300 11.2% 2.8% -8.4%
Newcastle £127,200 2.9% 2.8% -0.1%
Cambridge £432,400 8.1% 1.9% -6.2%
Oxford £418,400 9.5% 1.2% -8.4%
Aberdeen £179,700 -9.2% -3.0% 6.2%
20 city index £252,700 7.4% 5.3% -2.1%
UK £212,100 6.9% 4.8% -2.1%
Birmingham leads way for house price growth

Birmingham leads way for house price growth


Commenting on the findings, Richard Donnell, Research and Insight Director at Hometrack, said: ‘There remains a clear divide between the prospects for house price growth in regional cities, where affordability levels are attractive, and the prospects for house price growth in London and other high value cities in southern England.

“We expect house price growth in regional cities to be sustained at current levels for the rest of 2017 whereas London is set for a sustained period of low nominal house price growth and lower sales volumes’[1]



Birmingham top buy-to-let hotspot

Published On: June 11, 2015 at 10:03 am


Categories: Property News

Tags: ,,

A new report into the best postcodes for buy-to-let rental yields has produced a surprise winner.

According to data from property peer to peer lending platform LendInvest, Birmingham is the city where the greatest rental yields can be achieved. Other front runners include Ipswich, Liverpool and Glasgow.

Despite Birmingham beating London in terms of rental yields, the capital still has postcodes which deliver the best overall returns on investment as a result of capital gains pushing up house prices.

Working out

Rental yields are working out by taking the yearly rental income from a property and then calculating this as a percentage of the total property value. By using one-million sales and five-hundred thousand rental listings from Zoopla, LendInvest then took the average rental price per year and divided that figure by the average property asking price.

The data revealed that four one the top ten highest rental returning areas are in England’s second city, with returns of 13.6% in B44, 11.9% in B42, 10.5% in B98 and 9.1% in B23. In Ipswich, landlords average returns are 10.8% in IP4 and in Liverpool, landlords can achieve a yield of 9% in the L28 postcode area.[1]

Birmingham top buy-to-let hotspot

Birmingham top buy-to-let hotspot

Branching out

Jane Morris, managing director of Property Let By Us, feels that more landlords are branching out in order to achieve maximum yields. Morris said that, ‘many landlords tend to invest near to where they live, but if they look further afield, they could easily increase their yields and capital growth.’ She continued by saying that, ‘the Midlands provides a great investment opportunity as the property is much more affordable than the South East and the yields are high. For example, in Coventry, a three bed semi will cost around £125,000 and will provide rental yields of around 6.57%.’[1]

Morris went on to say that, ‘many of the landlords that we work with are netting between 6.57% and 9.1% from their properties in Birmingham, Coventry and Nuneaton. My advice to any landlord looking to invest outside their area is carry out through research on property prices, rent prices and yields to ensure they make the right investment.’[1]