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Rental Yields in Birmingham 2022

Posted by Jehan Anis on June 21, 2022
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Find out the rental yields in Birmingham 2022 and how property rates are anticipated to change over the next year as new facilities and increased demand supports rising rental yields in Birmingham.

 

Demand in Birmingham is at an all-time high, with an influx of new facilities fuelled by both new construction and local government investment. This has solidified its status as the top choice for London leavers while also bringing aspiring professionals from all around the country to the city.

 

Rents have increased as a result, which was inevitable.. According to Zoopla statistics, rental yields in Birmingham in 2022 will average 6.56 percent, while property prices remain relatively cheap compared to those of rivals. This is much higher than London’s unemployment rate of 2.90 percent and even the national average.

 

In the future, these rents are anticipated to increase

even more.

 

According to data from JLL, Birmingham’s rental rates might climb by 12 percent over the next five years — the highest rate of growth in the nation. Invest in Birmingham for the highest rental yields. 

 

This is likely owing to the city’s ambitious plan for regeneration over the next two decades. Numerous high-quality developments are in the pipeline for Birmingham, and projects such as HS2 could have a revolutionary effect on the city’s potential as a commuter hub.

 

Investors in Birmingham real estate have an excellent opportunity to capitalize on the excitement around the upcoming Commonwealth Games by increasing the value of their rental property.

 

The Top Ten Rental Yields in Birmingham for 2022

 

Like any other city, Birmingham has some regions that fare better than others. Differences in rental yields and property prices can be linked to several factors, including supply and demand and foreign investment.

 

While this is reflected in Birmingham’s property investment forecasts for 2022, the city still anticipates high returns and competitive prices, several of which exceed the UK average.

 

Here are some of the highest rental returns in Birmingham:

 

 

Location

Area

Avg price

Avg yield

Avg rent (pcm)

Bordesley Green, Bordesley

B9

£148,271

5.10%

£630

Smethwick (east and north), Bearwood (east)

B66

£160,522

5.73%

£766

Oldbury, Tividale

B69

£167,985

5.14%

£720

Kitts Green, Stechford

B33

£170,106

4.95%

£702

Jewellery Quarter, Hockley

B18

£172,158

6.18%

£886

Smethwick (west), Bearwood (west), Londonderry

B67

£175,731

4.79%

£701

Chelmsley Wood, Marston Green, Kingshurst, Fordbridge

B37

£193,812

4.92%

£794

Digbeth, Highgate, Eastside

B5/4

£194,126

5.91%

£956

Perry Barr, Kingstanding, Great Barr

B44

£195,133

4.55%

£740

Birmingham City Centre, Broad Street (east)

B1

£198,691

5.36%

£887

 

Data sources: Home and Zoopla

 

 

Why Are Rental Yields In Birmingham Booming?

 

 

Birmingham is a popular place for investors since it is a perfect example of a market that can provide a high-end city-center lifestyle at an affordable price. Birmingham’s rental yields are high because the city is both popular with renters and can command sufficient rental revenue to offer above-average returns for investors. In addition, the city’s job prospects, resident amenities, and nightlife all contribute to its high rental yields.

 

While it has traditionally been referred to as the “second city” compared to London, Birmingham real estate has undoubtedly led the way since 2016.

 

While London’s real estate market has struggled due to astronomically high prices and low rental yields, places like Birmingham have redefined themselves as premier investment sites.

 

Despite a 39% increase in prices over the last decade, Birmingham’s property prices remain modest compared to London’s – £214,696 vs £648,942. However, since 2007, the city has been producing great returns and competitive growth, and with many new projects on the horizon, its potential only grows with each new development.

 

HS2 would, for instance, connect Birmingham to a whole new London market. With the city overnight becoming a commuting hub, the prospect of a much larger tenant base would fuel demand. At the same time, infrastructural upgrades and new attractions sprouting around the city are providing support for this rising demand.

 

On the other hand, future developments indicate investors’ and local governments’ faith in the city.

 

As an illustration of how redevelopment shapes Birmingham’s future, projects such as Birmingham Smithfield provide a concrete example. As a new destination, Smithfield is anticipated to generate 2,000 new employment and 3,000 new houses when completed.

 

The Best Property for Rental Yields

 

 

Which property has the highest rental yield? It’s a typical question among investors, and for a good reason — identifying the property type that may provide the highest income is quite helpful throughout the research process.

 

Combining data from Zoopla and Home, it appears that, amongst homes and apartments, Birmingham rental property gives the highest average rental yield at 7.01 percent. This greatly exceeds the average rental yield for detached properties in the area, which stands at 4.99 percent, and reflects how well Birmingham rental yields perform as a whole.

 

Remember that these numbers indicate the gross yield, not the net yield. To calculate your net return, you must include operating expenses in your investment. As you can expect, these fees might vary based on size, the number of properties, and even the strategy you implement, such as a home with numerous renters or single-tenant property.

 

For investors looking for a quick look at the previous performance of UK real estate, these gross yields are an excellent starting point.

 

What Will Influence Your Rental Yield?

 

One of the most sensitive property investment indicators is rental yield, which is affected by various variables.

 

Typically, yields will be mostly determined by market demand and popularity.

 

 This implies that adequate research is essential. As an investor, you should continue your due diligence and assess how your investment may perform in the present and the future.

 

When examining external variables that might influence investment, consider local employment possibilities, future redevelopments, residential undersupply, and transportation connections to other prominent markets.

 

In addition, you should consider the demographics of your desired tenants. It’s possible to take advantage of potential renters’ proximity if you know who they are. For example, if you’re investing in a region with a large student population, you’re more likely to consider student accommodation than investing elsewhere.

 

Similarly, young professionals will want a community close to employment prospects, a vibrant nightlife, and other recreational activities. As a significant professional hub outside of London and having more than 100,000 young professionals, Birmingham has a booming leisure industry with many amenities that young professionals want.

 

Finally, if you want to avoid problems in the future, try establishing a “rainy day” fund. For example, excess rental income might be used to construct a reserve fund during detrimental vacancy periods. Birmingham Property investment is the best option for investors. A safety net may be a lifeline for many investors since voids can be incredibly detrimental when spread across a portfolio.

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