Buy-to-let; the ‘Birmingham Boom’

Thinking of expanding your investment opportunities? Then look no further than Birmingham’s thriving buy-to-let market. With a range of new and existing developments in the Birmingham area returning fantastic rental yields, there has never been a better time to invest in one of Britain’s most financially and culturally significant cities.

Why Birmingham?

You don’t need to look far to find a myriad of reasons why to buy-to-let in Britain’s second largest city. Recent investment in local infrastructure is helping the rental market to thrive by encouraging people to not only work and play, but live within the city. The new £600 million development of New Street Station along with a £128m extension of the Metro, £65m runway extension at Birmingham International Airport and recently approved £32bn high-speed rail-link, HS2, link to London, Birmingham is a city chosen by many not only to live, but work and play as well. The rental population in Birmingham is broadened by the large student presence, from both national and international origins, who have chosen to study at one of the city’s three highly ranked universities. Employers from business start-ups to multinational organisations are attracted to Birmingham in order to take advantage of the city’s unique professional and stylish venues. Cadbury, Land Rover, Jaguar and Deloitte are just some of the globally recognised brands employing thousands of staff within the area who make full use of the entertainment and cultural aspects of Birmingham such as the new £189m library. These factors combined with the lively nightlife and international commercial presence of the city, make choosing to buying-to-let here nothing short of common sense.

What your money can get you.

When buying-to-let it is important to know what your money will get you, i.e. the rental yield. To work out the rental yield, the annual rental income acquired from the property is calculated as a percentage of the property cost. LendInvest (https://www.lendinvest.com/) has looked at approximately 1,000,000 sales and 500,000 rental listings from Zoopla in order to work out the top 10 areas of the UK with the highest rental yield. They have done this by taking the average asking price per year and dividing it by the average asking purchase price of the property. The results were then broken down by the first part of the area postcode, the outcode.

Out of these top 10, Birmingham was included in 4 of the highest rental yielding areas; B44 (Old Oscott) with 13.6%, B42 (Perry) with 11.9%, B98 (Lakeside/ Ipsley/ Winyates West) with 10.5% and B23 (Erdington/ Stockland Green) with 9.1%. Other areas in the top 10 included Ipswich, Liverpool and Glasgow. These recent figures explain why the Birmingham’s buy-to-let market has been so popular, seeing a diverse range of properties catering for all tastes, from flats and apartments to traditional family homes and executive properties. With a classic 3-bedroom house in areas of Birmingham starting from less than £100,000, properties known as ‘bargain houses’ have potential to be sturdy investments. This type of rental accommodation has become increasingly popular with young families willing to rent for a period of time in order to be in a specific catchment area for certain schools. Factors like this mean that the buy-to-let market will always have a client-base.

2015 has been marked a historically significant year for Birmingham, being one with some of the largest investments within the public sector. This in turn has had an undisputed positive effect on the property market especially within property investment potential. Buying-to-let can be an opportunity for investors new and old to make the most of the great returns Birmingham property has to offer.

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