Birmingham may not be the first place you think of when naming the most popular buy-to-let locations. But look at little closer and you’ll soon see why the city has been listed in the best buy-to-let hotspots.
At the beginning of the year, the city was named in the top 20 buy-to-let places in the LendInvest Buy-to-Let index that compared rental returns to property prices. The list provided key information for landlords about where the best yields on property could be found, and Birmingham was ranked top.
It is hardly surprising that landlords are turning their attention away from London to more so-called “satellite” areas, such as Birmingham as high property prices in the capital are making the returns less attractive.
This is down to rental yield, which is calculated – in its simplest form – by dividing the annual rental income by the total property cost.
The typical price of a property in Birmingham is around £167,000, according to property website Zoopla. It compares to almost £290,000 for the country as a whole.
At the same time, rents are typically higher compared to the rest of the country, producing attractive rental yields for landlords.
Development in Birmingham
Birmingham has undergone a huge reinvention during the past 10 years. Once barely on the map for buy-to-let investors, it is now one of the popular areas for them. There are plenty of new houses and apartments springing up in the area and infrastructure to support them – such as the new Birmingham New Street Station.
One of the biggest developments being planned in the area is Paradise Birmingham, which covers 17 acres. It will bring a host of new offices and leisure facilities to the city, and it is scheduled to be completed in 2025.
Transport in Birmingham
There are also huge changes underway regarding transport in Birmingham, with a focus of making the city easily accessible to the capital. These include a new high speed train connection to London, known as HS2. Investors are acknowledging the transformation, snapping up properties as soon as they come onto the market. A development of new build properties that were released onto the market last year by estate agent Knight Frank was reported to have sold out within days.
Areas of Birmingham
So which areas of Birmingham are popular for landlords? There is the student haven of Selly Oak or the cosmopolitan area of Moseley, which attracts young professionals. The latter has plenty of trendy restaurants and bars, but both offer attractive returns for investors with small flats asking around £500 per month in rent.
Renting in Birmingham
For those looking for houses to rent in Birmingham, this two bedroom property is available for £565 a month via Rentify. It is within five minutes walking distance of a train station and bus stop, with links to the city centre and the airport.
If you are looking for an unfurnished house with three bedrooms, try this property that is available to rent for £700 a month via Rentify.
In one of the most prestigious addresses in Birmingham is this two bedroom penthouse, renting for £2,500 a month. The property is in the heart of the city and is only a two minute walk to New Street Station.