When it was recently announced that overseas real estate investors were turning away from the London market, many expected the majority to move into the southwest and nearby regions such as Oxford. What they did not expect was for investors to make their move in the West Midlands market, which at first glance lacks the glamour and appeal that is boasted by the capital.
The rising expense of London property has forced investors to act, however, and the West Midlands as a vibrant, industrial hub that also offers considerable value for money.
The Stats behind the Growth: Why is Birmingham such a Magnate for Real Estate Investors?
This same value for money has also made the West Midlands a popular destination in for UK investors, as it offers wide range of property options and the ideal balance between growth and value.
Here are some statistics to help explain this further, which have been provided by the expert property firm HomeLet.
Annual Rental Prices have increased by 6.9% in the West Midlands
While regions such as the southwest and London offer higher rental yields, the UK’s annual variation of 6.9% offers the ideal balance for investors. This not only reflects the growth in the region and ensures them a viable return, for example, but it also ensures that there is a market of potential tenants that can afford to rent properties on long-term lease arrangements.
This creates the ideal equilibrium in terms of supply and demand, which is currently absent in London where price points are pricing aspiring tenants out of the market.
The average Rental Price in the West Midlands is £648 per Month
This is balanced and affordable rental average, and one that is unlikely to deter tenants from entering the market. The current status of the market also ensures that there is a wide diversity of properties available, however, from houses costing £300 to £399 per month to four bedroom homes in more affluent areas demanding upwards of £799.
This has created a wide range of affordable rental properties in the UK, which are capable of meeting a diversity of financial needs for both low and high earning tenants.
The Average Income in the West Midlands is £23,990 per annum
This is a competitive average salary in the UK, even in comparison with supposedly more affluent areas in the south of England. The average annual salary in the South west is only slightly higher at £26,556, for example, but the median monthly rental cost of £878 is £230 higher than the West Midlands.
This is disproportionately higher, unless all of a tenant’s additional salary is to be committed to rent alone. One again, this underlines the balance in the West Midlands market and its appeal to global and domestic investors alike.