Investors across the world agree that the UK’s property market is one of the most stable investment markets, despite the political uncertainty that comes with an event such as Brexit. In 2019, the UK looks set to reclaim its position as Europe’s leading investment target, demonstrating it’s continued stability. While historically, London has been one of the strongest markets for investment, rising prices and a growing cost of living has meant its popularity has waned. As returns have continued to slump, investors have instead looked to the bigger regional cores such as Birmingham, where the market is more affordable and higher yields are more achievable.
So what has caused this shift in investor activity towards Birmingham, and why should more South African investors be following suit?
Better Value In the Market
Birmingham is a city centre that may be smaller than London but offers a similar level of amenities with a much more affordable price tag. Birmingham is also still growing, with room for new businesses and people as well as the opportunity for sustainable growth. By comparison, the capital is a saturated market that is much more competitive in a number of ways.
Location is a critical factor in the investment. Birmingham sits at the very heart of the UK and can access all of the major UK cities in under two hours. With the arrival of HS2 on the horizon, rail travel to London will be slashed to just 49 minutes, putting Birmingham another step closer to the capital and all of the major global business that is located there.
Unprecedented Inward Investment
A combination of this value and the connectivity Birmingham offers amongst other benefits has attracted big national and international corporate businesses such as HSBC, HMRC and PwC to open new headquarters within the city – with HSBC’s having recently opened this October.
On a global scale, Birmingham has won the bid to host the 2022 Commonwealth Games and attracted its highest number of FDI projects to date, peaking during 2017.
Market Leading Tech Growth
During 2018 the UK was a prominent market for tech investment, growing digital technology and its value across the economy. Birmingham, in particular, has continued to build on its history of engineering and data sciences, resulting in a winning bid to trial 5G technology.
Over 100 times faster than 4G, this new technology could improve public transport, hospitals and emergency services immeasurably while encouraging start-ups and helping established businesses evolve and grow.
Strongest Economy Outside London
As well as the city’s impressive investment statistics, Birmingham also has a £24.8billion economy – the strongest outside London – and is home to the largest business, financial and professional services (BFPS) hub in the UK outside London. Birmingham currently employs more than 123,000 people in this sector, and in the period 2016 to 2022, this is expected to have grown by 19,000 according to the Birmingham Skills Investment Plan.
As London continues to outprice renters and buyers alike, more people are looking further North for an attractive yet affordable alternative. ONS data shows that Birmingham is the most popular destination for people leaving London, peaking in 2017 at just over 7,000 people.This demonstrates that even though global businesses have recognised what Birmingham has to offer, the public is also being attracted to the second city.
A lot of this increased demand is down to the amount of investment entering the city – creating new residential, commercial and retail spaces while building generational developments such as HS2, Paradise, Arena Central and Birmingham Smithfield. It’s these developments that will shape the Birmingham skyline and raise the profile of the city even further, attracting a wider market of both investors and tenants.
As a major part of Birmingham’s growing landscape, SevenCapital currently has a number of exciting investment opportunities across Birmingham, designed to help you reach your investment objectives going forward. To find out more about these opportunities and SevenCapital, visit www.sevencapital.com.