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08 February, 2016
Birmingham is becoming an increasingly popular destination for overseas buyers investing in UK property. Birmingham's growth in popularity saw it leap up 14 places in last year's list of top European property investment destinations to take sixth place, and then retain that ranking for a second year running as London fell out of the top ten.
Birmingham's ranking in the latest report on the top cities for property investment in Europe, carried out annually by PwC and the Urban Land Institute, makes it the top destination in the UK and the only British city to make the top ten. London, which has been a fixture of the top ten for several years, fell to 15th place.
Birmingham's rise as a star destination for UK property investment is partly a result of domestic and overseas investors increasingly looking for better value outside of London, which has traditionally been very much the star city of UK property investment. International investors, especially, have for a long time not been comfortable straying too far from the capital and its immediate surroundings but are now starting to take much more of an interest in the regions. London's prices are high, and the yields in most areas are disappointing compared to those available in other cities, and this is now proving enough to tempt even some of the more timid investors into new parts of the country.
Birmingham is well-placed to form the next destination for many of those property investors who are leaving London and looking for a new UK city to put their money into. At the time of its entry into the top ten European destinations, it was reported to be second only to London in terms of the number of new businesses starting up in the city. This, combined with a large number of existing businesses big and small, makes for a strong commercial market with a reliable stream of demand.
A large and rising population, and the draw of all the employment that its business scene creates, means a similarly strong level of demand for residential properties. Both the commercial and residential sectors – and indeed the city as a whole – are likely to receive a significant further boost upon completion of HS2 and the significant improvement this will represent in transport links with London and other major areas of the UK.
This does not mean London should be underestimated. Indeed, it retains a very big asset in the form of its perceived stability and it is expected to make a prompt re-entry into the top ten when the market shifts and people are looking for safety again. However, right now the UK and global markets are simply not in this place. In terms of value, affordability and – perhaps most importantly of all – yields, property investment in Birmingham decidedly outstrips London and this, in essence, is why it has outranked it by nine places in the most recent report and why it is continuing to attract investment from international buyers.
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