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UK’s second city now first choice for savvy buy-to-let property investors
January 7, 2015Article by Charlotte Ashton
With the UK buy-to-let market continuing to excite both domestic and overseas investors, the race is on to find the top hotspots for 2015. An early contender is Birmingham, which saw house prices grow faster than those in London (by 0.6% and 0.5% respectively, according to Hometrack) in the three months to November 2014.
Birmingham has long been known as Britain’s ‘second city,’ but it seems as though 2015 may be the year that it becomes the country’s first city so far as buy-to-let property investors are concerned. Ray Withers, Chief Executive of Property Frontiers, one of the UK’s leading specialists in buy-to-let properties, comments,
“The stars are certainly aligning so far as Birmingham is concerned right now. House prices there are growing faster than they are in London and office rents are due to hit a seven-year high according to Knight Frank. This combination of booming business and demand for high quality accommodation in the city centre means that buy-to-let opportunities are offering some impressive returns, as well as capital growth.”
Property Frontiers has been active in the Birmingham market for some years. It’s latest development in the city, No. 1 Hagley Road, is on the brink of selling out, thanks to its combination of excellent location and high spec finish. Available from £104,500, the apartments offer expected yields of between 7% and 8%.
Seen as a more affordable alternative to London, by both business and individuals, Birmingham is attracting an increasing number of professionals in their 30s, many of whom want to rent decent accommodation in a central location as soon as they arrive.
London itself is losing out. In the year to June 2013 figures from the Office of National Statistics show that record numbers of people in their 30s left the capital (some 58,220). Nearly 10% of them opted for Birmingham instead, looking to stay in a world class city for career and cultural reasons, but ready for an alternative to the capital.
With the HS2 railway system expected to impact positively on Birmingham property prices once it has been implemented, the city is set to become even more attractive as a buy-to-let investment hotspot. Ray Withers continues,
“2015 should be a bumper year for Birmingham’s buy-to-let market. As in many UK cities, supply can’t keep up with demand, so there’s a real thirst for good accommodation from the tenant side, which is great news for investors looking to profit from bricks and mortar. Birmingham is definitely the city to watch this year.”