HS2 is a high-speed railway project in the UK that will connect London, Birmingham, Manchester, and Leeds. The introduction of HS2 is expected to have a significant impact on the Birmingham property market, as the high-speed trains will significantly reduce the commuting time from London to just 49 minutes.
As with any investment decision, it depends on your goals. However, there are several factors to consider when deciding whether to invest in Birmingham’s buy-to-let property market before or after HS2 completes.
While HS2 will undoubtedly have a significant impact on Birmingham’s property market, it’s not the only factor driving property prices upward in the city. Birmingham is the UK’s second-largest city, with a booming economy, a center for culture, and a major retail destination. It had everything going on before HS2 was announced.
Moreover, the city is facing a severe shortage of quality new build homes, which may pose a problem for property investors looking to access the Birmingham market in the future. JLL’s report predicts that demand will outstrip supply in Birmingham by 2025, less than two years away! Prices are rising in the city, meaning the earlier you buy, the better rental return you can generate. Capitalizing on your ROI through the upswing in prices predicted – over 19% by 2027, according to JLL.
Waiting for HS2 to complete could mean buying at a higher premium, and there is a risk of not finding the right kind of stock to buy at all. On the other hand, once the trains start running, the increased connectivity that HS2 will bring will make Birmingham even more attractive to businesses and individuals, further increasing the demand for housing in the city.
Location is crucial in Birmingham’s top-performing rental properties. Tenants who live in Birmingham’s city center prefer to walk to work. Therefore, investing in properties located in the city’s key places of work is an excellent strategy. For example, the Jewellery Quarter developments are only a short walk from Birmingham’s CBD and other significant areas of employment, with prices starting from only £199,500. Contact us to learn more about the available opportunities, such as Tyndall Court, which is expected to have a 10-year return on investment of 150% based on a short-term lease with an interest-only mortgage.
In summary, investing in Birmingham’s buy-to-let property market before HS2 completes can offer excellent rental returns and capital appreciation potential, given the city’s many other positive factors.
About the Author
Sophia, who is Head of Property Investments at CI-Associates, draws upon her wealth of experience in investment strategy, property economics, and sales to offer clients valuable insights on a daily basis. Fluent in both Spanish and English, Sophia is dedicated to educating Ci-Associates’ clients on the key factors that drive successful property investments and how to sustain high performance over time. Whilst providing accurate and dependable market analysis and insights, Sophia specializes in assisting overseas investors in optimizing their property investments.
