Mind the Gap: 4 Reasons Birmingham is Outperforming London’s Property Market
With Knight Frank forecasting a price growth of 4.5% for Birmingham in 2018, and a cumulative price growth of 14% until 2020, the West Midlands is forecasting incredible property price growth and continuing to pull ahead of the capital. Below you’ll find four reasons why Birmingham is outperforming London property.
House prices are growing four times faster
According to Hometrack’s UK Cities House Price Index December 2017, London’s capital growth year-on-year reached only 1.8%, compared with Birmingham’s chart-topping growth of 7.5%, the highest in England. Thanks to a multibillion-pound ‘Big City Plan’ by Birmingham city council and record levels of foreign investment being pumped into the city centre, the residential market is reaching record levels of growth and demand and investors are taking notice.
House prices are three times cheaper
Birmingham house prices averaged £190,238 against London’s overall average price of over £749,268 according to property portal Rightmove, which indicates plenty of scope to grow even further. As Birmingham is already the number one destination for Londoner’s leaving the capital, there’s every chance house prices in Birmingham will continue to see an upward trend.
Four times the space for your money
In city-centre terms, Birmingham’s average house price could buy you a brand new spacious one-bedroom apartment and you’ll pay a little more than average to bag a parking space in a prime Birmingham city-centre spot. In London, the same amount will buy you a parking space in a prime spot in central London, or a tiny, well-lived in studio apartment without parking and only 16 years left on its lease, which will cost you upwards of £20,000 to renew for a longer term once it runs out.
As a landlord, this means in Birmingham you have the opportunity for two rental incomes – one for the apartment and one for the parking space. In London, you have one, which is likely to become less favourable to the tenant in the long-term. And for those that can’t afford to buy yet, you can rent a two-bedroom apartment with parking in prime Birmingham city-centre for £950 or rent a much smaller space for the same amount in Central London, most likely without parking.
Proximity to major UK cities
Connectivity is a huge way in which Birmingham is outperforming London. Located in the heart of England, Birmingham is the most accessible city in the UK. All major cities are within a 4-hour reach and once the High-Speed Railway (HS2) launches in 2026, Birmingham to London will take just 49 minutes. This investments in infrastructure have certainly put Birmingham on the map, with the likes of HSBC, Deutsche Bank and HMRC all moving their headquarters and thousands of employees due to lower operating costs without sacrificing accessibility to the capital. The resulting influx of young professionals migrating to Birmingham has resulted in increased demand for quality residential apartments in a market that’s already significantly undersupplied.
These four points alone are a great example of why the West Midlands and Birmingham are quickly becoming an alternative investment option to London. With further investment on the horizon, Birmingham is set to reach new heights in the coming future.