Student cities have long been appealing to investors. With thousands of students requiring housing year after year, investors know that by investing in property, they will have a steady stream of demand which can help to return impressive yields if the property is deemed desirable by students.
However, not all university towns or cities are ideal places for investments. If a university struggles to fill up its places or has a low number of students, property options can actually outstrip the number of students, which means that investors can at times be left with empty properties or receive lower-than-expected yields. Investing in a city with a great university is therefore a must.
If you are thinking of investing in a student city, Birmingham is a great choice. It is currently ranked as the 7th best university city in the country by the QS Best Student Cities 2023 guide, which rates university locations on factors including affordability and desirability and feedback from existing students.
Top 10 UK University Cities
The updated top 10 list of student cities contains some of the biggest cities in the UK such as London and some more up-and-coming hidden gems too:
- London
- Edinburgh
- Glasgow
- Manchester
- Coventry
- Newcastle Upon Tyne
- Birmingham
- Bristol
- Nottingham
- Leeds
In the worldwide survey, Birmingham ranks 50th in desirability, 79th in employer activity, 94th in affordability, and 26th from the student’s perspective, making it the 7th best city in the UK and 45th best in the world!
So if you are starting to look at England’s second city a bit differently now from an investor’s point of view, what do you need to know about this amazing place to live?
Where is the best place to live for students in Birmingham?
Birmingham actually has five universities, (although only Aston and the University of Birmingham were considered in the above survey), positioning it as a premier hub for higher education outside of London. This abundance contributes to a vibrant student atmosphere in the city.
Unsurprisingly, numerous student accommodations pepper the city, ensuring ample housing options. Popular areas include:
Urban Heart
Modern student residences have sprung up in the heart of the city, reflecting a trend seen over recent years whereby students are prepared to pay more for a central location, so they are close to all the action. City central addresses command higher rent, so one can expect an average of £150 per person weekly return for a bedroom with ensuite facilities in a newly designed student accommodation block.
Hockley Heights & Hamstead Haven
Positioned at the city’s edge, these areas promise a 20 to 40-minute foot journey to central campuses or a 10-minute bus trip, making the area a lower-cost alternative to city centre apartments. Dominated by traditional terraced homes and flats, it’s a blend of local inhabitants and student life whereby students can feel like they are living in a real city as opposed to an enclosed student area. Budget-conscious students may prefer this location for its affordability without sacrificing proximity to the city. The usual rent hovers between £85-£95 per person weekly.
Edgbaston Estates
A bustling student hub, Edgbaston hosts City South students, those from University College Birmingham, Aston University, and BCU’s downtown campuses. The closeness to City South makes it a student favourite. Traditional terraced homes designed for groups of 4 to 6 dominate. With rents around the £100 weekly benchmark, some landlords offer comprehensive deals, and summer rents are often halved for July and August.
Selly Oak
Being adjacent to the University of Birmingham, Selly Oak boasts the densest student lodgings. This proximity, however, elevates rents past the £100 weekly average, with no summer deductions. Traditional terraced homes are modified to host groups of 4 to 7. While the student atmosphere draws many BCU attendees, the 5-mile distance to the city centre requires considering transportation options.
Where should you buy-to-let to students in Birmingham?
If you are thinking about taking the plunge and investing in buy-to-let property in Birmingham, which areas are best for landlords?
The B29 postcode boasts the highest rental yield in Birmingham with an impressive average of 9%. It encompasses regions like Selly Oak, Selly Park, and Bournbrook, and reaches up to Weoley Castle. Predominantly, areas like Selly Oak and Bournbrook are student favourites due to their vicinity to the University of Birmingham and its acclaimed medical school at Queen Elizabeth Hospital.
Yet, as potential investors delve into Birmingham’s property landscape, you should dig deeper into each district. Beyond immediate yields, one should also forecast long-term asset growth. For instance, while B29 might excel in rental returns due to students, areas like Digbeth or Edgbaston, preferred by young working professionals, might experience a quicker surge in property value as they’ll always be in demand thanks to their more affluent reputation.
Is it worth entering the buy-to-let market?
Now is a fantastic time to enter the buy-to-let property market in Birmingham as the city is showing amazing potential.
- The city’s population is expected to reach 1.23 million by 2038, bolstered by a young workforce; 40% are under 25.
- With a workforce of around 498,800, the city is supported by its five internationally recognised universities that funnel talent into these businesses.
- Birmingham’s rising population and a projected shortfall of 78,415 homes from 2020 to 2042 indicate a potent combination of rising property values and rental demand, making it ideal for investors.
- House prices in the city grew by 13.8% in 2022, with an average property value of £269,385. Forecasts suggest a 19.2% growth in property values over the next five years despite falls in property prices expected elsewhere in the country.
- Rents increased by up to 20% from the previous year, and predictions indicate potential growth of 19.3% between 2023 and 2027. Birmingham’s average rental yield is around 5.5%.
- Birmingham is reinventing its cityscape with notable projects like the 103 Colmore Row Tower, Paradise City Redevelopment, Birmingham Smithfield, and more. These developments, attracting billions in investment, uplift both residential and commercial property values.
Birmingham’s thriving economy, robust property and rental market growth, and transformative developments make it a compelling destination for property investors.
Contact We Buy Any Home Today
If you are a buy-to-let investor who wants to invest in Birmingham but perhaps is struggling to sell a tenanted property, or have problems with cladding, let We Buy Any Home help. We’re the biggest cash-buying company in the UK and can ensure your property funds are with you in as little as just 7 days, no matter its condition or if you have problem tenants.
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