What HS2 Means for Birmingham
What is HS2 and the impact for Birmingham?
Imagine the fastest running train in Europe connecting London and Birmingham, travelling up to speeds of 250mph, carrying more than 1,000 people per train and reaching its destination in less than an hour. By 2026, that will be High Speed 2 (HS2), a high-speed rail link between the capital and the second city.
HS2 is aiming to become the backbone of the UK rail network, a plan that has been initially split into three phases over a 15-year development span. By 2033, the UK government is hoping to have a route that begins with London and leads to the North, stopping at major cities including Birmingham, Leeds and Manchester.
Anticipation for the rail link is already having an effect, driving investment into cities along its planned route. Following the development schedule; by December 2026, Phase 1, which links London and the West Midlands, will be complete with the first services set to start running in that year.
Why will HS2 make a financial impact for Birmingham?
So how will HS2 impact Birmingham property? The initial development of the line will encompass Curzon Street Station, which is being revitalised to serve as the main hub for HS2 in the city. This redevelopment alone will introduce a wealth of new jobs to the city. It’s also acting as a vote of confidence, a tangible example of the commitment from the Government to strengthen a thriving Birmingham, with excellent infrastructure and investment across the region.
As part of the Big City Plan, HS2 will join new and contemporary developments such as the Birmingham Smithfield Project, Paradise Birmingham and Arena Central, a collection of projects that represent an unprecedented level of inward investment.
Centro & Future Travel believe the boost in investment, as businesses flock to Birmingham, could even see 22,000 permanent jobs and a Gross Value Added (GVA) impact of £1.5bn by 2026, creating a stronger West Midlands economy.
What are the forecasts for HS2 and Property Prices?
Unsurprisingly, HS2 is also having a huge effect on Birmingham property prices. With the average Birmingham house price up by 8% since 2017 and only set to rise further, buyers are jumping at the opportunity to purchase in a location which is seen as up-and-coming, connected and affordable.
This is reinforced by increases all across the city, for example, the average house price in Ladywood, Birmingham has risen from £147,121 to £172,498 (17%) in a year.
At the same time, we’re also seeing a huge increase in tenant demand from renters looking to leave the capital, where the property is cheaper and increasingly available. With young professionals and new families seeking better rental opportunities, demand is hitting new highs as waves of tenants look to Birmingham.
HS2 represents a key development for London commuters, effectively turning Birmingham into a commuter hotspot overnight. Slashing the commute between the two cities to just 49 minutes, Birmingham will become accessible for a whole new working market. The City of London area (which is just over a square mile) alone has 300,000 workers that commute there for work.
The Halo Effect of HS2
When it completes, HS2 will directly or indirectly impact most aspects of development in Birmingham, though the commercial sector will benefit particularly due to the economic boost it could deliver for the region – 22,000 permanent jobs and a £4 billion increase in economic output per year when it completes. The immediate area around Curzon Street, the HS2 hub, will likely experience a ‘halo effect’ as a result of such large investment and excellent travel links nearby and it’s expected that HS2 will cement Birmingham as the largest business, professional and financial hub in the UK outside of London.
The retail and leisure sectors will likely benefit from increased footfall via local travel link improvements as well as HS2 making the city more accessible to areas further afield. It should be highlighted however, that HS2 is just one aspect of a vast master plan that is transforming the city. While HS2 is a once-in-a-generation infrastructure project, it’s joining a slew of other regeneration that’s contributing to the larger rise of the city.
HS2 has also caused many corporations to take note. With HSBC, PWC and Deutsche Bank both setting up headquarters in the second city, HSBC has moved 1,000 jobs from London to Birmingham, many of which are near Digbeth, in the proposed home of the HS2 hub in the city.
Thanks to these economic factors and developments, Birmingham has fast become a key UK destination for residential property investment, with a chronic undersupply of residential units not meeting the soaring demand. If you’re looking to invest in UK property, Birmingham is forecasting growth across the residential, commercial and hospitality sectors, all of which is helped by HS2.
It’s not a stretch to say that HS2 is already showing signs of kickstarting another ‘industrial revolution’ in Birmingham. The city has already solidified its position as the biggest business, professional and financial hub in the UK outside of London. By 2026, it will have direct access to the biggest city in Europe and no doubt be a hotspot for investors across the globe.
Where is HS2 going to be located?
HS2’s Central Station will be located on Curzon Street in the Eastside of the city in Digbeth. Eventually, the extension will lead to Edinburgh, Glasgow, Newcastle, Leeds and Manchester. With Digbeth already on the rise, the addition of transformational developments such as Birmingham Smithfield, HS2 and Connaught Square will deliver unprecedented demand to the district while providing the state-of-the-art amenities that the modern tenant wants.