If you’re thinking about entering the expat buy-to-let market for the first time or expanding an already existing portfolio, you want to make sure the location you choose offers the returns you hope for.
The UK market is huge and despite some slowdown because of the so-called Brexit effect, there are still plenty of opportunities to be had. Outside of London, Birmingham is tipped to be the expat buy-to-let hotspot of 2017 offering a great return on your investment, both in terms of annual rental yield and long term property value increases.
Not only is it currently proving extremely popular with Chinese buyers keen to gain a foothold in the UK market, a shortage of available properties means prices are likely to climb well in the next year.
But as an expat it isn’t always easy to see the appeal of places outside of London so we’ve put together a short guide on why Birmingham might be just the place for your next financial move.
Property market growth and rental yields
The Birmingham property market is very buoyant and with huge amounts of investment flooding into the city this is likely to remain the case for many years to come. Compared to London, the property prices are very reasonable yet still offer a decent return on investment. The average price of property is currently £183,429 with the price of a terraced house £147,468 and the cost of a semi-detached property £189.969.
You can expect annual rental yields of 7% and a projected capital growth of around 20% on your investment, which is a great alternative to low savings rates and the stock market with all its inherent volatility. The average return on investment over the last five years is 7.4%.
A vibrant city
What you would choose as a family home and what is attractive to renters are often two very different things and you need to look at factors which give you the best chance of long term rentals. If you are aiming for the student market, then you need to look for clean and comfortable. If you are aiming at the young professional market, then modern and close to the main amenities will be important.
Birmingham is a city full of culture and entertainment. The Bullring provides a great shopping experience and there are a plethora of events taking place each year. From international cricket matches and the Muller Indoor Athletics Grand Prix to the Birmingham Marathon, the Brindleyplace Film Festival and a whole host of other attractions. Whatever your renters’ interests, there is something to please everyone.
A growing hub for international business
With London property prices at a premium, more and more businesses are looking outside the capital and locating their headquarters in the Midlands and the North of England. The HS2 rail development means London is easily accessible from Birmingham and has led to almost £1 billion of investment in the city, which means business get the vital transport links they need without paying the high property prices of the capital.
Deutsche Bank has shifted many of its functions to the city, taking its employees in Birmingham from just 30 to more than 2,000. HSBC has planned to relocate 1,000 jobs from London to Birmingham from the middle of 2017 onwards and US architect Gensler and law firm Hogan Lovells have also recently located there.
Set in the heart of England, Birmingham is perfectly located for both London and the South East as well as the North of the country. The transport links are excellent and with the advent of the HS2 rail link they are likely to get even better.
Birmingham Airport is an international hub offering direct flights to destinations around the world, the city is home to Cadbury’s and Bourneville chocolate and it’s a great base from which to explore the West Midlands.