Gerald Eve research suggests market boom for Birmingham BTR

New research by Gerald Eve reveals that Birmingham is primed for a Build to Rent boom in the near future.

Birmingham skyline from the West, taken in January 2021 - Gerald Eve | BTR News
Birmingham skyline from the West, taken in January 2021. Image credit: Stephen JG, CC BY-SA 2.0 via Wikimedia Commons.

Birmingham’s Build to Rent market is set to expand rapidly in the coming years according to new research by specialist real estate advisors, Gerald Eve. Investment in Build to Rent schemes soared to £553m across six transactions in 2021 – an increase of 40% compared to 2020 (£394m). In 2021, Build to Rent investment volumes in Birmingham were more than double that of Manchester and second only to London. Investors and developers are waking up to the opportunity presented by the city’s Build to Rent market.

Build to Rent investment by top 10 UK cities, 2021

Gerald Eve estimates that the potential pool of prospective Build to Rent residents in Birmingham is significant and growing. Those aged 25 to 45 are most likely to demand the style of housing that Build to Rent schemes can offer, but existing schemes attract all ages.

Across Birmingham, the estimated population of people aged 25 to 45 accounted for almost 30% of the city’s total population in 2020, and is expected to grow by an additional 1.6% by 2025 – which is well above the overall UK average of 0.8%.

“House prices in Birmingham have risen sharply since 2020, with the housing affordability ratio in the city currently standing at 7.6 times the annual median wage. As a result, we will see more and more young professionals and families choosing to rent rather than buy, driven either by cost or by preference.”

Bobby Barnett, Partner, Gerald Eve

Birmingham City Council has concluded that over the next ten years, housing delivery must be scaled up dramatically to meet the needs of Birmingham’s growing population, and Birmingham’s Build to Rent sector is well placed to make a significant contribution to the provision of new homes.

The Birmingham Development Plan (BDP) 2031, adopted in 2017, states the need for an average requirement of 2,550 homes per annum, between 2011 and 2031. However in the last decade, Birmingham city’s housing completions have fallen short of annual targets, leaving a deficit of 14,230 homes.

“Birmingham is primed for a Build to Rent boom in the near future. The city’s growing demographic of young people combined with the rising cost of housing make its Build to Rent market an attractive proposition for investors and developers, and there are a number of developments already under construction.

“However, only two are set to complete this year, and there is plenty of room for more schemes in the development pipeline, especially given Birmingham’s woeful housing deficit of over 14,000 homes. The increased delivery of Build to Rent schemes is also in line with Birmingham City Council’s aim to raise the quality of homes available in the private rented sector.”  

Charles Boyes, Partner, Gerald Eve

Gerald Eve’s research shows that there are 4,390 Build to Rent units currently under construction in Birmingham, with two schemes set to complete in 2022. A further ten schemes totalling 9,981 units have planning permission, and there are 25 schemes currently going through the planning stages.