Birmingham: Captec's Investment Hotspot for 2019 - INVESTMENT AREA GUIDE - Captec Wealth ...
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Birmingham: Captec’s Investment Hotspot for 2019 INVESTMENT AREA GUIDE
And, with a host of new expansion plans and investment
opportunities already in the works, the city is starting to grab
the attention of income-seeking investors from around the UK.
Regional Economy – The
“Birmingham is cosmopolitan, dynamic Midlands Engine
and accessible from just about anywhere
in the UK”.
The Midlands economy is already worth more than £217bn9,
but there is still plenty of room for growth.
Matthew Woods, Captec Wealth Group Following the success of the Northern Powerhouse scheme,
the UK government has launched the ‘Midlands Engine’ plan
as a way of stimulating economic growth in the East and
West Midlands. Moreover, as the largest city in the Midlands,
Birmingham is perfectly placed to take advantage of these new
opportunities. Over the next 15 years, the government plans to
create 300,000 new jobs and £34bn worth of growth in the area,
by supporting businesses and innovation10.
The Library of Birmingham Bullring Shopping Centre, Birmingham
Introduction Birmingham City Council has also announced its own 20-year
7.92%
‘Big City Plan’, which it has described as “a vision to encourage
and support Birmingham’s continuing transformation into a
Birmingham is known as the UK’s ‘Second City’ due to its rising world-class city centre.”
population, rich history and growing economy. Situated in the
heart of England, the city is home to more than 1.1m people3, while
the greater Birmingham area houses almost 2.5m residents4 , five
universities, and a property sector which is in the early stages of a Transport – HS2 and Beyond
major growth spurt. AVERAGE
RENTAL YIELD IN Already, Birmingham is one of the best-connected cities in the UK.
Birmingham is the second largest city in the UK, yet it has been Birmingham New Street is the busiest train station in the UK outside
overlooked historically by investors in favour of London, Manchester BIRMINGHAM. 1 of London11 and a major hub for the UK train system. Commuters
and Liverpool. However, all the fundamentals are in place to make and professionals can travel from Birmingham to London, Liverpool
Birmingham an attractive investment option for anyone seeking to or Manchester in less than 90 minutes. Cardiff and Swansea are just
make market-beating returns over the short, medium and long term. over two hours by train, while Glasgow and Edinburgh are four hours
4.4%
by rail.
A survey by PWC and Demos that looked at factors such as transport,
work-life balance, inequality and health, found that Birmingham In addition, the city centre-adjacent Birmingham Airport offers flights
is the fastest improving place in the country to live and work5. across Europe, while the nearby East Midlands Airport services several
Meanwhile, the Ladywood area6 of the city recorded the UK’s highest international flights.
growth in property prices last year, and the city’s house prices even
outstripped those in London. However, the arrival of HS2 is set to transform the city’s transport
The imminent arrival of the HS2 rail link, a thriving student IS THE AVERAGE infrastructure. Phase one of the HS2 plan will install a high-speed
rail link between Birmingham and London, with an expected journey
population and a string of government incentives have combined RENTAL YIELD IN time of just 49 minutes. Considering that the typical London commute
to make Birmingham a particularly promising option for property
investors. Recent research has found that the average rental yields for THE UK. 2 takes around 45 minutes, this is likely to attract a swathe of commuters
to the city – particularly around the Curzon Street area where the HS2
Birmingham-based homes range from 5.95% to a massive 10.87%7, terminus is set to be based. The first phase of HS2 is due for completion
depending on the size and location of the property. Even at the lower in 2026, with work on the tracks due to begin in 2019.
end of the market, this easily exceeds the average UK rental yield of The Jewellery Quarter, Birmingham
4.4%8.
1. https://www.loveyourpostcode.com/birmingham-buy-let-yields-5-9-10-8-year NB: average yield calculated using the table half-way down the page (four average 7. https://www.loveyourpostcode.com/birmingham-buy-let-yields-5-9-10-8-year
yields listed depending on the type of property). 8. https://www.propertywire.com/news/uk/average-rental-growth-england-wales-led-east
2. https://www.propertywire.com/news/uk/average-rental-growth-england-wales-led-east (as per quote towards end of article. Figures dated to December 2017).
9. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/598295/Midlands_Engine_Strategy.pdf
3. https://www.birmingham.gov.uk/info/50065/population_and_census/1003/population_in_birmingham
4. http://www.jll.co.uk/united-kingdom/en-gb/Documents/Greater%20Birmingham%20An%20economic%20renaissance.pdf 10. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/482247/midlands-engine-for-growth.pdf
5. https://www.pwc.co.uk/who-we-are/regional-sites/midlands/press-releases/12-companies-in-midlands-region-shortlisted-in-uk-private-business-awards-201641.html 11. https://www.birminghammail.co.uk/news/midlands-news/birmingham-new-street-uks-busiest-6753851
6. https://www.theguardian.com/money/2017/nov/28/birmingham-area-named-poorest-in-uk-fastest-house-price-rises-ladywood
Captec’s £500 million Smithfield Masterplan
and home to Birmingham Curzon
some schemes already hitting £425
- £450/sqft in Q1 2018, and with
Guide to
Street Station – the soon to be hub the ongoing investment into the
of the HS2 Line, which will connect city, we believe this to be a fair and
Birmingham to London in under 50 achievable projection .” Matthew
Investing in minutes! Woods, Captec Wealth Group
“With the huge plans for East Side
Birmingham Birmingham, we will see a significant
increase in infrastructure, transport
Should I buy
Birmingham is currently undergoing
links, job creation, retail and
commercial activity. This should
off-plan?
a huge transformation as part of their lead to significant growth in the
Big City Masterplan, creating huge With the right due diligence and
residential sector, which currently
opportunities for the educated property strategic approach, buying off plan can
has a shortage of low maintenance,
investor. be a very profitable and hassle-free way
new-build apartments.” Matthew
to make significant growth and income
The forefront of Birmingham’s Woods, Captec Wealth Group
returns, however it can come with risks
regeneration is to provide an exceptional so buying the right apartment in the
standard of living with efficient right development is key.
transportation around the city.
The developer, the location, the
Birmingham will have more public The Cube, Brimingham
squares, parks and pedestrian spaces, specification and pricing must all be
combined with it’s beautiful canal considered to ensure a good purchase
network which is to be restored. New Street Station demonstrate the standard of living that is made. Captec ensure that any
Birmingham is set to offer its residents development we present to investors
With more Michelin Starred restaurants A £700mn+ project, which now moving forward. Curzon Street Railway Station, Digbeth has passed our stringent due diligence
than any other City in the UK other than completed, gives Birmingham the and has the key fundamentals to be a
London as well as beautiful bars and transportation links to support its good investment and minimise the risk
cafes overlooking the water, Birmingham
will soon provide a World Class standard
wider regeneration plans. “Property prices in The Jewellery
Quarter have shown significant
Plan for the future to investors.
of living, that will be recognised globally.
growth over the last few years as Buyer’s expectations continue to rise “Sourcing, renovating and letting a
”New Street Station sets the standard the area has transformed with prompting developers to consider pre-built property can become a full
Consider the for Birmingham’s Regeneration.
High end retailers are positioning
its regeneration. When chosen
correctly, there are still some
the quality of schemes that are being
delivered. The increased demand
time job. Buying off-plan, can be a
great option for ”cash rich, time
area: themselves in and around the
station now, in anticipation of
great opportunities in West Side
Birmingham, however other areas
for low maintenance, high quality
apartments, is being seen across the
poor” investors, or indeed anyone
that doesn’t have the time or
the city’s transformation moving such as East Side Birmingham are at board: from compact flats, to larger expertise to add value to a property
When considering purchasing an much earlier stages in their ambitious apartments. through renovation. Captec have
forward – New Street Station is just
investment property in a redevelopment redevelopment plans and therefore measures in place to reduce the risk
the beginning!” Matthew Woods, With Birmingham continuing to attract
city such as Birmingham, is important to present greater growth opportunities and hassle associated with investing
Captec Wealth Group residents from more affluent areas of
consider the regeneration plans for each at today’s pricing.” Matthew Woods, into property, whilst seeking
micro-area within the city. This allows the UK, in particular the South East,
Captec Wealth Group. the standard of residential property in maximum returns.” Matthew
an investor to strategically purchase
West Side Birmingham Birmingham has to change, creating a Woods, Captec Wealth Group
in an area where property prices are East Side dramatic transformation in the city and
likely to rise at a faster rate than the its surrounding areas.
Regeneration of West Birmingham is
overall average of the city. Birmingham Probably the most exciting and
already well underway, with Paradise
has many emerging areas undergoing undervalued area of Birmingham at “A year ago Knight Frank suggested
Circus, The Jewellery Quarter and
transformation as part of its Big City this current moment in time. Digbeth values for prime residential schemes
Arena Central, home to HSBC’s new
Masterplan: should be a very interesting investment in Central Birmingham would
head office after their relocation
from Canary Wharf, continuing to hotspot throughout 2018, hosting the reach £500/sqft by 2020. With
Source of article: https://www.birminghammail.co.uk/news/property/buying-property-birmingham-city-rightmove-12960671
Investments – A Window of
Opportunity
For new and veteran property investors, there is
no shortage of opportunities in Birmingham.
“The growth potential is enormous – even without
accounting for the new opportunities which HS2
will bring.”
Matthew Woods, Captec Wealth Group
The city is well known as an affordable place to
live for students, young professionals and families,
but there are signs that this is changing.
In Ladywood, house prices rose by an
extraordinary 17% between July 2016 and July
2017, due to an influx of young professionals
from other parts of the country17. In fact, in
August 2017 it was revealed that net migration
from London had exceeded migration into
the city, with a lot of former London-dwellers
New Street Station, Birmingham choosing to relocate to the Second City instead.
However, despite its growing popularity,
Birmingham is still one of the most affordable
Forecast for Growth Leisure – The Schools – A Modern cities in the UK for first-time buyers and buy-
to-let investors. While the average UK property
Birmingham is behind the curve with its Commonwealth Games University City costs £210,40118, the average asking price for
a Birmingham-based property is just over
regeneration, presenting huge opportunities for
investors seeking healthy returns. and More With the University of Birmingham, Birmingham
City University, Aston University, University
£150,00019. According to Hometrack UK,
property price growth is even outpacing London –
The 20-year Big City Plan aims to improve transport Birmingham is already a British centre of College Birmingham and Newman University, year-on-year house price growth in Birmingham
connectivity, as well as building 5,000 new homes culture and sport. It is home to two of the Birmingham is a university city five times over. stood at 7.3% in January 2018, while London
and creating 50,000 new jobs12. The arrival of the country’s oldest professional football teams – More than 75,000 students live in the city during property prices grew by just 1.6% over the same
HS2 link will also attract increasing numbers of Aston Villa FC and Birmingham City FC – and term time14, and many choose to stay on after their period20.
Londoners to Birmingham, where property prices will soon expand on its sporting prowess as the studies to pursue work nearby.
are much more competitive. host of the 2022 Commonwealth Games. Ahead Find Out More
of the Games, the city’s Alexander Stadium is Purpose-built student accommodation has been Birmingham is a smart choice for anyone with an interest in UK
being renovated to extend its capacity to 50,000 rising steadily in the city, but according to Cushman residential property. It is a dynamic hub with links to every corner
seats. It has been estimated that the Games will & Wakefield’s UK Student Accommodation of the UK, and the house prices are affordable enough for the
generate a £526m boost to the West Midlands Report 15, there are just 21,768 bed spaces 16 for most budget-cautious first-time i nvestor. Th e ri sing re ntal yi elds
regional economy13. the 2017/2018 academic year, which highlights the of the past few years prove that the city already has what it takes
pressing need for more landlord-owned properties to attract new residents, even without the promise of HS2 and the
in student areas. government’s Midlands Engine scheme. But, for forward-thinking
investors, the foundations have already been laid for Birmingham’s
12. https://www.birmingham.gov.uk/bigcityplan
19. https://www.hometrack.com/uk/insight/uk-cities-house-price-index/
future growth.
13. https://www.insidethegames.biz/index.php/articles/1059667/birmingham-to-get-526-million-boost-from-2022-commonwealth-games
14. https://www.birminghammail.co.uk/all-about/birmingham-student-guide (average Birmingham house price £154,000 as per January 2018).
20. https://www.hometrack.com/uk/insight/uk-cities-house-price-index/
15. http://www.cushmanwakefield.co.uk/en-gb/research-and-insight/2017/uk-student-accommodation-report-2017/
(comparison taken from one-year values January 2017-2018).
If you are interested in learning more about how to invest
16. http://thebirminghampress.com/2018/01/student-living-provision-reaches-new-record/
17. https://www.theguardian.com/money/2017/nov/28/birmingham-area-named-poorest-in-uk-fastest-house-price-rises-ladywood in Birmingham, get in touch with Captec on: 020 7183 3892
18. https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2018/Feb_2018.pdf
Captec Wealth Group • 1 Knightsbridge Green, London, SW1X 7NE • 020 7183 3892
www.captecwealthgroup.com
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