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The growing rental yields in Birmingham 2022

Posted by bigroarltd on February 28, 2022

Rental yields in Birmingham 

Birmingham is now the top alternative to London, attracting many professionals and London leavers. It cemented its place through the number of high-quality developments and investments from the government. In addition, major projects such as the HS2 (high-speed railway) will impact Birmingham’s accessibility, providing connections between cities. 

These factors increased the levels of demand in Birmingham, leading to a rise in rental prices. Rental yields in London for 2022 are averaging 2.90%, according to data from Zoopla. However, Birmingham is significantly higher at 6.56% and is even higher than the UK average itself. 

The city is the host for the next Commonwealth Games and has a regeneration project planned for the next 20 years, which investors can utilise. Investors can use the engagement that comes with these events to gain more on their property investments. 

Birmingham’s Rental Yields for 2022 Top 10 

The performance of certain areas in a city will vary due to the supply and demand in those areas. Nevertheless, Birmingham is still forecasting many areas to surpass the UK average in the 2022 property predictions, offering strong yields and competitive pricing. Here are the top rental yields. 

Location Area Avg yield Avg price Avg rent (pcm) 
Jewellery Quarter, Hockley B18 6.18% £172,158 £886 
Digbeth, Highgate, Eastside B5/4 5.91% £194,126 £956 
Perry Barr, Kingstanding, Great Barr B44 4.55% £195,133 £740 
Smethwick (east and north), Bearwood (east) B66 5.73% £160,522 £766 
Bordesley Green, Bordesley B9 5.10% £148,271 £630 
Chelmsley Wood, Marston Green, Kingshurst, Fordbridge B37 4.92% £193,812 £794 
Birmingham City Centre, Broad Street (east) B1 5.36% £198,691 £887 
Smethwick (west), Bearwood (west), Londonderry B67 4.79% £175,731 £701 
Oldbury, Tividale B69 5.14% £167,985 £720 
Kitts Green, Stechford B33 4.95% £170,106 £702 

  Data sources: Home and Zoopla 

What is causing Birmingham rental yields to rise? 

Presenting many attractive qualities such as career opportunities, resident amenities and fantastic nightlife, Birmingham brings a high-end city-centre lifestyle at an affordable price. Commonly perceived as the “second city” compared to London, Birmingham is beginning to lead the way in the property market, being a key investment destination. It maintains above-average returns for investors and is popular with tenants due to the affordable prices: whereas London has struggled with incredibly high costs and low rental yields in the property market. 

Improvements to the local infrastructure will welcome a new London market with the development of the HS2, for example. Birmingham will become a commuter hotspot with many large businesses moving their headquarters to the city, creating a wave of more working professionals, further increasing demand. The Birmingham Smithfield project is expected to provide around 2,000 new jobs and 3,000 new homes, showcasing the growing confidence in Birmingham’s future from the local government and investors. 

With a 28% rise in rents over the past ten years and a 39% property price rise, Birmingham has low property prices compared to London with figures of £214,696 and £648,942, respectively. The future for Birmingham’s regeneration is bright, and the potential only rises as it continues to display healthy yields and competitive market growth. 

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