Rents rise across Birmingham due to big fall in available properties
The rising cost of debt and cost of living pressures did little to subdue demand for homes in Birmingham with average rental values rising 17.9% annually according to the latest research from JLL.
The ‘Big Six’ research, which tracks residential development activity, prices and rents across Manchester, Birmingham, Leeds, Bristol, Edinburgh and Glasgow, highlighted continued demand from young professionals and both domestic and international students as the key drivers for the increase in value, alongside a reduction in supply.
In Birmingham, rental property stock has fallen by 5% in Q2 2023 and by 16% since before the pandemic, as landlords continued to leave the market due to economic constraints. At the same time, over the past ten years the city’s population grew above the UK average at 6.7%, placing even greater pressure on the residential market.
The increase in rents across the ‘big six’ clearly demonstrates not only the demand for city centre living but also the need for more homes. This is not exclusive to the rental market, with a requirement for more homes of all tenures needed to address demand.
The sales market also grew across the city, but at a slower pace recording a 1.9% annual increase. One bedroom apartments had the highest growth at 2.5% overall, with the average price now sitting at £205,000.
William Cox, director of residential markets at JLL in Birmingham, commented: “Birmingham continues to be a place that people want to live, work and play in, so it is unsurprising to see such an increase in rental values here. However, its growth is being hampered by a lack of residential properties at all levels which is either causing people to look elsewhere or is pricing people out of the city. If we are to continue attracting the best talent, whether this is through the workforce or the city’s student population, we need to work quickly to ensure that homes are being planned and brought to market as soon as possible and in the places that need them.”
Marcus Dixon, director of UK residential research at JLL, said: “Younger residents and students are continuing to drive demand across the UK’s regional cities, as they prioritise the neighbourhood in which they live and access to key amenities. This is a trend that we expect to continue, particularly as young professionals seek employment opportunities outside of the capital due to cost of living pressures.
“What has become clear through our analysis is that neither the sales nor rental market is currently able to keep up with demand. With fewer landlords entering the market, and the rate of new builds slowing, government intervention is needed to restimulate the market and ensure that there are enough homes for the people that need them. By creating opportunities for people to live and work in our regional cities, it will stimulate further inward investment and contribute to the success of our cities long term.”
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