The Birmingham property market is booming. A new data from the HM Land Registry shows that the average house price in the area is £188,254 this year. This price rose by 5.8% compared to the same period last year when the average price amounted to £177,993. This increase means an average homeowner had a gain of more or less £10,000 during the said period.
The value of detached houses in the West Midlands even rose by 6.1% over the year, while flats had a price appreciation of 3.7% in the past year. These price increases are higher than the national house price increase in the whole of the UK, which rose by 1.7 in the year to January.
The Big City Plan and HS2 High-Speed Railway
The Birmingham property market is receiving tons of investments in anticipation of two significant developments in the area: the Big City Plan and the HS2 High-Speed Railway. These developments will bring major changes in the city, and hopefully, attract more investors to come.
The Big City Plan is a 20-year masterplan created to build thousands of new homes, 28 kilometres of walking and cycling routes, 65,000 square metres of public space, and 1.5 million square metres of floor space. This project expects to generate 50,000 jobs and £2.1 billion of annual revenue for the economy.
The HS2 railway will connect Birmingham with the markets of Manchester, London, Leeds, and Sheffield. Through this, the city hopes to increase the economy as it becomes more attractive for young professionals and businesses.
These changes to the city will increase the ranking of the Birmingham property market, as more people are looking at other alternatives to London, where the market is already saturated.
Knight Frank Sees Economic Growth in the Next 10 Years
In the Knight Frank report, the Birmingham market will grow by more than a quarter in the next ten years. This economic growth means the city will be home to more than 100,000 additional households within the next 20 years. For the city to address this demand, they will need to provide 3,500 more homes per year. Due to this, Knight Frank predicts house price increases by as much as 12.5% by 2022.
JLL Research echoes this positive prediction. In the West Midlands Residential Report 2018, JLL noted that house prices in the West Midlands posted faster growth than the national average in the UK with a 5.4% increase in 2017, and Birmingham is at the centre of this growth. In the same report, JLL sees house price appreciation of as much as 15.9% and rental rate growth of 13.1% come 2022. This growth in the Birmingham property market is in line with the forecasted 2.1% economic growth and 0.6% employment growth annually.
With that said, it is clear that the Birmingham property market is on an upward trend. Investors looking to expand their UK real estate portfolio should start looking at the city’s growth potential.