Posted on 25th November, 2020

Birmingham’s Build-to-Rent Boom

By Laura O'Sullivan

Birmingham Build-to-Rent market goes from strength to strength.

Birmingham is set to become one of the top UK towns to experience an increase for rental accommodations, outside of London. According to a study by CBRE, transactions in Birmingham’s private rented sector equaled £326.7m last year, which was the highest amount outside of London. A further 10,000 rental households are forecasted to be added to the sector in the next 10 years.

Stuart Eustace, director in CBRE’s Birmingham residential and development team, said: “London has led the BTR revolution so far, but Birmingham and other regional cities, while later to the party, are now witnessing their own BTR booms.

“CBRE’s analysis identifies three main factors influencing greater demand for rental accommodation, including locations with higher percentage of population aged 25 to 34, high numbers of students, and the relative size of the economy. Birmingham scores highly in each of these areas. Furthermore, there is good rental growth in the city, making it attractive for investors and developers.

“Put all these factors together and Birmingham’s BTR fundamentals are solid, with strong prospects for further growth in the sector.”

With this, UK households in the private rented sector increased from 2.8 million in 2007 to 4.5 million in 2017. Totalling an increase of 1.7 in just 10 years.

CBRE forecast that the current 21% of Birmingham’s households are private renters is set to rise to 26% in the next five years. City centre percentages are estimated at 56% and forecast to rise to 63%.

What is Build-to-Rent?

Build-to-Rent is a property that has been developed specifically to rent out to other occupiers rather than the owners. They are developments that are typically owned by companies such as property developers, pension or insurance investment companies.

The demand of the rapidly growing rental market has powered the growth of Build-to-Rent properties which is a scheme that is additionally backed from the UK Government. Homes are in demand which has resulted in more than £10bn investment projects in the sector.

Wavensmere Homes

It’s encouraging to see Birmingham’s property market go from strength to strength. Last week we discussed JLL’s UK Residential Forecast Report which forecasted that Birmingham will see the highest UK house price and rental growth from 2022-2025. This, along with CBRE’s analysis suggests it’s the ideal time to invest in the city.

After last week’s announcement that The Forge has officially sold out, we have two last properties in Birmingham to invest in. Located just 4 miles from the city centre is our Crocketts Lane development. With opportunities to gain over 6% rental yield.

Contact us for more information.