Birmingham is in the midde of a renaissance – or, as some have dubbed it, a Brummy Bounce.
The city has enjoyed a series of infrastructure refurbishments, most notably of New Street Station, and a report by PwC ranked it the sixth best in Europe for investment – not bad for an area that had borne the brunt of the decline in British manufacturing.
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It’s also starting to look like an extremely attractive place for buy-to-let investors. While capital growth might not be as high as investors have previously banked on in places like London, the rental yields are rocketing. So what are the buy-to-let hotspots?
Best areas for buy-to-let in Birmingham
In a recent report, four Birmingham postcodes claimed places in the top ten areas in the UK for rental yield.
The B44 postcode covers Perry Barr, Kingstanding, and Great Barr, and in 2015 it saw average rental yields of 13.6 per cent. Perry Barr includes the North Campus of Birmingham City University, so there are big opportunities in student housing.
Lots of Birmingham’s top spots are within easy reach (Villa Park is just down the road), and all of the areas covered by B44 are well served with supermarkets – and, enticingly, there’s also a fair amount of green space.
Property prices are also attractive. A three bed semi-detached house in Great Barr will set you back around £150,000, while, if you’re lucky, you might be able to snap up a one bed flat for less than £100,000.
This postcode covers part of Perry Barr, Great Barr, and Hamstead. The average rental yield in B42 was 11.9 per cent. Hamstead is well connected to central Birmingham, with plenty of regular bus routes running into town.
Property prices are similar to those in B42; currently on the market is a two bed maisonette for £90,000, or a three bed end terrace for £150,000.
The B98 postcode saw yields of 10.5 per cent in 2015. This area includes east Redditch and Beoley. While this postcode is outside Birmingham’s ring road, it remains a desirable position for buy-to-let, with the average yields still twice what you’d get in the highest yielding areas of London.
Property prices can vary quite significantly depending on area. For example, there is a four bed detached house, just a mile from Redditch station, on the market at the minute for £270,000. At the other end of the market, you could pick up a two bed terrace for as little as £100,000.
What should you look for in a Birmingham buy-to-let investment?
As we’ve seen, Birmingham is attractive not necessarily for capital growth, but instead for rental yields. It’s attracting a lot of inward investment, and there’s talk of several large banks moving there. If you want to make the most of the opportunity, consider the following things:
- Transport links
- Proximity to universities, schools, and work hubs
- Regeneration projects
- Local amenities
Are you thinking about investing in buy-to-let in Birmingham? Tell us in the comments.