Birmingham House Prices: Trends, Factors, and Future Predictions

Let’s take a look at the predictions for Birmingham house prices in 2023 and beyond to see why investors should take a closer look at this destination with both affordability and high growth potential. 

In the heart of the West Midlands, the thriving cosmopolitan city of Birmingham is not only a highly desirable place to live but a property investment hotspot. 

In this blog post, we take a look at house price trends in the UK’s second-largest city.

The Birmingham Property Landscape 

House prices in Birmingham have experienced strong price growth over the last five years. Since June 2021, Birmingham house prices have experienced growth of 5% on average, and prices are currently more than 10% higher than before the pandemic.

One of the major factors driving Birmingham’s growth and popularity amongst property investors is a shortfall in housing stock compared to demand. 2022 saw 39% fewer homes available to rent compared to the same time a year ago.

Soaring demand for rental homes is a pattern we are seeing across the UK. This pattern is in part due to property prices at some of their highest ever levels, meaning people are renting for longer to save up for the required deposit. 

Rents on the Rise

Just as house prices Birmingham have made the city an attractive destination for investors, the city has an appealing rental market, too. In the second half of 2022, Birmingham house rent prices on new, one-bed flats in the city were £900 per calendar month and £1,200 per calendar month for two-bed flats, representing 16% and 20% rental growth, respectively (compared with prices at the end of 2021).

Investment and Birmingham’s House Prices

In 2022, houses in Birmingham experienced a price boom. The Commonwealth Games held in July and August 2022, put a global focus on the city, bringing new jobs and seeing the construction of 5,000 new homes.

£750 million in investment has been put aside to ensure the legacy of the Commonwealth Games in the coming years. Birmingham house prices are set to be positively impacted by this international multi-sport event and the ongoing investments as part of the funding will only further increase Birmingham’s appeal amongst prospective homebuyers.

According to Rightmove, average house prices in Birmingham are currently £277,599. This figure is 9% up on the previous year and 17% up on the 2020 peak of £238,006.

JLL predicts Birmingham house prices will experience 5% annual growth in 2023. 

Birmingham House Prices Forecast Beyond 2023

In terms of the housing market, Birmingham attracted the most investment of all cities outside of London with £380 million funding 1,478 homes for the city. The city currently has the largest build-to-rent market at 16,300 homes and also has the largest development pipeline, at 13,200 homes. 

The Birmingham property prices forecast is set to be one of the strongest markets in terms of house price growth, with 19.2% growth predicted between 2023 – 2027. Average house prices in Birmingham could see investors earning strong capital gains.

Rising Rents Beyond 2023

Birmingham City Centre property market has seen a shortfall in rental properties. With the UK’s record-breaking house prices, many landlords decided to sell their properties to make the most of the capital gains on offer. As more landlords cashed in on high property prices, the amount of rental stock available decreased significantly, pushing up rents.

Birmingham is set to lead the way for rental price growth. In 2022, Birmingham recorded the second-highest annual rental growth at 18% with Manchester ranking top at 22%. According to JLL, rents in the UK’s second city could see rents grow by 19.3% between 2023 – 2027.

Is it Worth Buying Property for Sale in Birmingham City Centre?

If you’re considering property investment in Birmingham, the city centre continues to be one of the best-performing areas. According to Rightmove, sold house prices in Birmingham last year grew to reach £240,535 for a typical home.

Whether Birmingham city centre house prices will continue to rise will really depend on the supply-demand imbalance. If the imbalance continues, we are likely to see property and rental prices in the city centre continue on their upward trajectory. 

Looking for more information on property investment in Birmingham? Check out our article on 10 Reasons to Invest in Birmingham and Where to Buy.

Why Buy Property in Birmingham?

With rising popularity due to the Commonwealth Games and incoming investment transforming the city, the future looks exciting for Birmingham. Property prices remain buoyant and are set to increase as the city becomes an increasingly desirable place to live. Now is a great time to get in to capitalise on the predicted increase in house prices and an active rental market.

Is Birmingham More Expensive Than Manchester?

The cost of living in Birmingham and Manchester is around the same. Both cities are receiving huge sums in investment and regeneration and enticing professionals from London due to lower costs of living alongside strong job prospects, giving the buy-to-let market a boost. 

What is the Trend in the Birmingham Property Market?

Birmingham’s housing market is poised for remarkable growth, projected to outperform other regions with an impressive 19.2% surge in house prices from 2023 to 2027. 

Not only does the city exhibit robust potential for capital gains, but it also takes the lead in rental price appreciation. In 2022, Birmingham experienced a substantial annual rental growth of 18%, securing the second-highest position nationwide behind Manchester.

What are the Best Areas of Birmingham?

The property market in Birmingham has plenty to offer. In terms of lifestyle, areas like Digbeth are attracting a young professional crowd. Crowned Birmingham’s Shoreditch, with a host of pubs, coworking spaces and creative spaces, Digbeth is an up-and-coming area. Which is additionally popular with both couples and individuals, making the rental market particularly lucrative for landlords. 

Those with families tend to look to Birmingham’s more suburban areas like Moseley. 20 minutes from the city centre by bus, Moseley boasts plenty of open space and parks, summer festivals and events, good schools and a village community feel.

Conclusion

Birmingham offers property investors relatively affordable property with high growth potential. The legacy of the Commonwealth Games should give the city a boost. Additionally, investment continues to pour in, making the UK’s second-largest city an even more attractive investment destination. Birmingham house prices in 2023 look set to remain robust. And the city could see healthy growth in rents and house prices through 2027. To find out more about investing in property in Birmingham, get in touch with our property experts.