Buying a property in Birmingham: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Birmingham's property market is included in our pack

Are you considering investing in real estate in Birmingham? You're not alone!

Many people find Birmingham's urban amenities appealing and fantasize about owning a modern townhouse or a chic city apartment.

Would it be a smart investment, though? Are property prices increasing in Birmingham? What is the price per sqm? Should you consider investing in the city center or Digbeth? Are there any hidden fees? Where are the best yields?

In this article, everything is sorted out for you.

The Investropa team knows this market like the back of their hand. As a matter of fact, we've put all our findings together in a pack. Get it now.

In the lines below, we'll provide you with helpful information.

How's the property market in Birmingham?

Are property values increasing or decreasing? Let's check the latest data and statistics.

Types of properties

In Birmingham, there are various types of properties available for sale to cater to different preferences and needs.

These include houses, apartments, townhouses, and condominiums. Houses typically offer more space and privacy with a yard, while apartments and condos are ideal for those seeking low-maintenance living and access to shared amenities. Townhouses offer a mix of features, combining aspects of both houses and condos.

Additionally, properties in Birmingham may vary in size, location, and price range, providing a diverse selection for potential buyers to explore and find their perfect home.

Buying or renting?

(If you plan to use it yourself and not as a rental)

If Birmingham, the second-largest city in the UK, is where you plan to settle, you may be considering the advantages and disadvantages of buying versus renting a property.

Without a doubt, it's better to buy if you want the stability of owning a property and the potential to build equity over time.

Actually, the property price-to-rent ratio is a good metric to look at for this kind of decision. This number gives you an idea of how long it will take to break even on the property's purchase using rental income.

According to Numbeo, the property price-to-rent ratio in Birmingham is around 28.18, which is above the world average.

This value means that, on average, it would take you 28 years of paying rents to afford buying a property in Birmingham.

Property prices in Birmingham

On average, according to the last data from Halifax and Bank of Scotland, purchasing a property in Birmingham should cost you around $3,100 per square meter.

Of course, there are noticeable differences. A townhouse in Birmingham might have a different price per square meter than a suburban home in Solihull. We actually give you a more detailed breakdown in our pack for buying property in Birmingham and in the UK.

To put things in perspective, it is 6.1 times less than the property prices in the center of New York.

Also, housing prices in Birmingham are 78% cheaper than in London.

The most expensive neighbourhoods in Birmingham are probably Edgbaston, Harborne, and Solihull, while the cheapest neighbourhoods are likely to be Aston, Nechells, and Lozells.

Trends

First and foremost, we have to acknowledge that the United Kingdom remains, today, a very stable country. The last Fragile State Index that has been reported for this place is 40.6.

Don't overlook this while weighing the pros and cons of buying a property in Birmingham.

Also, according to the IMF’s forecasts, the UK's economy is expected to soar by 6% in the coming 5 years, resulting in an average GDP growth rate of 1.2%.

If you intend to invest in real estate in Birmingham it's a good thing because a growing economy (usually) leads to higher incomes for citizens, enabling them to invest in real estate, which boosts demand and prices for properties.

Also, in the UK, the average GDP per capita has changed by 0.5% over the last 5 years. The growth, although minimal, is still present.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in the UK right now.

Buying property in Birmingham

Buying real estate in Birmingham can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Birmingham and in the UK.

Buying process

Within our pack, we have outlined the complete buying process. This includes the necessary documents, the applicable taxes, as well as information about where to locate properties, and more.

Here, we are providing you with a simpler version to assist you in better comprehending the information.

This is the step-by-step process to purchase a property in Birmingham:

1. Research the Birmingham property market and set a budget.
2. Get pre-approved for a mortgage from a UK lender.
3. Find a real estate agent familiar with the Birmingham area.
4. Start viewing properties in Birmingham's neighborhoods.
5. Make an offer and negotiate the price with the seller.
6. Obtain an Energy Performance Certificate (EPC) for the property.
7. Arrange a RICS (Royal Institution of Chartered Surveyors) home survey.
8. Secure financing and finalize the mortgage agreement.
9. Review the contract with a solicitor who specializes in UK property law.
10. Exchange contracts and pay a deposit (usually 5-10% of the property price).
11. Complete the sale and pay the remaining balance.
12. Register the property with the Land Registry to transfer ownership officially.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in the UK.

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Where to find a property

Explore these websites to find properties in Birmingham:

• Zoopla - Find properties, check house prices, and get expert advice on buying, renting, and selling homes.
• Rightmove - A property search platform in the UK, offering homes for sale and rent, house prices, and property news.
• Find UK Property - Specializing in UK property for overseas buyers, UK expats, and buy-to-let investors. They offer low-cost houses with guaranteed rent and property management.
• Home.co.uk - The UK's comprehensive property search platform, connecting buyers and renters to over 566,000 properties and numerous estate and letting agents.
• On the Market - A property search platform offering UK homes for sale and rent, featuring new properties before they appear on Rightmove or Zoopla.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in the UK.

What you can get

As mentioned before, the average price per sqm in Birmingham is $3,100. The cost of a one-bedroom property (60 sqm) is about $186,000, and a two-bedroom (85 sqm) would be around $264,000.

However, as you can guess, property prices will differ based on the attributes of the property and its specific location.

Expect property prices to be on the higher side in the premium areas of Birmingham. Consider a villa in Edgbaston, which might have a price of around $750,000, while an apartment in Harborne could be valued at $330,000.

On the other hand, some areas are more budget-friendly. You might discover a residence in Hodge Hill for $310,000 or a residence in Erdington that's priced at $200,000.

Find a more detailed breakdown in our full pack for buying property in the UK.

Common pitfalls

Here are the main pitfalls specific to buying a property in Birmingham, UK:

• Leasehold property: Beware of short leases or high ground rent charges in certain areas.
• Green belt restrictions: Properties within the green belt may face development limitations.
• Birmingham's "right to buy" policy: Properties sold under this scheme may have limitations on resale.
• Flooding risk: Some areas near rivers or canals are prone to flooding, impacting property safety and insurance costs.
• Historic property issues: Older houses may have conservation restrictions or expensive maintenance needs.
• Commuter congestion: Proximity to busy roads and railways can lead to noise and transportation challenges.
• Industrial past: Some areas may suffer from contamination or limited redevelopment potential due to past industrial use.
• High demand zones: Competitive markets may drive property prices up, making it challenging to find affordable homes.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our United Kingdom Property Pack

Living in Birmingham

Birmingham is a vibrant city with a rich culture and plenty of activities to enjoy, making it an ideal place to buy property.

Cost of living

The cost of living in Birmingham is generally lower than the national average. While the cost of living in Birmingham is lower than average, the cost of housing is higher than the national average.

Here are some examples to better understand the cost of living in Birmingham:

• Monthly rent for a stylish apartment in the vibrant Jewellery Quarter: $800-$1,500.
• A pint of local Birmingham ale (e.g., Peaky Blinder) at a traditional pub: $3-$5.
• Monthly transportation pass for buses and trams within Birmingham: $50-$70.
• A cup of traditional Birmingham-style tea with a slice of Bakewell tart: $2-$4.
• Admission to the Birmingham Museum and Art Gallery: Free (donation optional).
• Monthly membership at a Birmingham-based fitness studio or yoga studio: $30-$60.
• Fresh produce from the Bull Ring Indoor Market for a week: $20-$40.
• A bottle of local Birmingham gin (e.g., Langley's No. 8) from a liquor store: $20-$30.

Neighbourhoods

We want to show our information in a way that is easy to understand and pleasant to read. So, we made a summary table to show the different areas of Birmingham. For yields, prices and rents, check our property pack.

Life in Birmingham

Birmingham is an economically diverse city, with a mix of large employers in the health care, banking, automotive, and manufacturing industries, as well as a thriving small business sector. The city has seen a resurgence in recent years, with new businesses and investments in its downtown area, and its population is growing.

What expats usually like the most about Birmingham is the great variety of activities available, such as its lively nightlife, its numerous museums and galleries, and its vibrant cultural scene. They also appreciate the city's affordable cost of living and its friendly people.

We'd love to tell you that Birmingham if a safe city but it's simply not the case. The crime rate index is currently at 63. The most common crimes in Birmingham are theft, burglary, and robbery.

A good point for a property investor - Birmingham has its own rapid transit system called the Birmingham-Jefferson County Transit Authority (BJCTA), which operates buses, MAX buses, and a light rail system called the MAX.

Access to healthcare in Birmingham is excellent, with a Healthcare Index of 72. A strong healthcare setup always reflects positively on real estate.

Finally, it is worth noting that the University of Birmingham ranks among the top 100 universities in the world.

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Renting out in Birmingham

This section is for you if you're interested in purchasing property not for personal residence, but rather for the purpose of renting it out to generate rental income.

Long-term

Tenant Profiles in Birmingham

According to the data reported by Wikipedia, the home ownership rate in the UK is 63%, which is not much.

It means that, if you decide to buy and rent out in Birmingham, there will be a lot of people who can become your potential tenants.

If you decide to buy and rent out to long-term tenants, you should target professionals, students, and families in Birmingham. Birmingham is also a popular city for young professionals, so you should consider targeting this demographic as well.

Here is a little summary table we've made for you.

Rental yields

As of today, rental yields in Birmingham are within the 3-4% range. It's low. A good rental yield is typically considered to be around 7% or higher (you might know it already).

Birmingham rental yields are highest in areas that are well-connected to the city centre by public transport, as these areas are popular with commuters and tenants looking for easy access to amenities. Areas with good schools, local amenities and outdoor spaces, such as parks, also tend to have higher rental yields as they are attractive to families and young professionals.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Birmingham are taxed at 20%, which is rather good.

Short-term

You could also decide to rent short-term to students, young professionals, and business travelers visiting Birmingham. Tourists who are visiting the city for its historical sites, shopping, and nightlife can also be potential tenants for short-term rental in Birmingham.

If you decide to go with that option, look for properties in the Five Points South, Avondale, and Lakeview neighborhoods. These areas have large student populations, making them ideal for short-term rentals.

Currently, there are approximately 4,000 active Airbnb listings in Birmingham, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $149, which is quite high.

You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Birmingham can make around $1700 per month. Also, the average occupancy rate is estimated at 55%.

Is it worth buying real estate in Birmingham then?

Buying property in Birmingham can be a smart move for individuals seeking long-term stability and potential equity growth. Birmingham offers a relatively affordable housing market compared to major global cities like London and New York. If you plan to stay in Birmingham for the foreseeable future, purchasing a property can provide a sense of security and financial stability. The property price-to-rent ratio suggests that buying is often a better option than renting in the long run, as you'll eventually start building equity.

Moreover, with the city's economy expected to grow, property values may appreciate over time, potentially increasing your investment's worth. However, it's essential to recognize that buying property in Birmingham might not be the right choice for everyone. If you're uncertain about your long-term plans or are looking for high rental yields, Birmingham may not offer the best returns. The current rental yields in the city fall in the 3-4% range, which is relatively low compared to more lucrative investment options.

Additionally, beware of potential pitfalls like leasehold property issues, green belt restrictions, and areas prone to flooding. Conduct thorough research and due diligence to mitigate these risks. Ultimately, whether buying a property in Birmingham is worth it depends on your specific circumstances, financial goals, and willingness to commit to long-term ownership.

Make sure you understand the real estate market in Birmingham

Don't rush into buying the wrong property in the UK. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.