How house prices have changed in Birmingham over the last two years
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House prices in the UK's second city have tended to follow national patterns over the last two years or so. However, there are many exciting developments in the pipeline that could give a serious boost to Birmingham's house prices in the next decade and beyond. On the other hand, it's important to consider a number of background factors which are out of the city's direct control which could negatively impact house prices in the city. We've stepped back from the daily whirl of statistics, figures and press releases to consider what's been happening to Birmingham house prices in the last two years and what the future is likely to hold. Read on for our findings.
House prices in Birmingham: The numbers
Birmingham has long suffered an unfairly negative reputation on the UK stage compared to other cities like Manchester, Cardiff or Edinburgh. This has held down the overall rate of growth in house prices and increases have been slower than in other areas of the UK. In the last year, according to the property portal Zoopla.com, house prices have grown by only 1%. That's less than the UK rate of inflation and overall wage growth which means that prices are falling and properties in Birmingham are becoming more affordable in real terms. Over the last five years, prices have increased by 26%. That might sound like a lot but again, it's slower that the UK average and lags significantly behind other major UK cities such as London and Manchester.
Where are the popular areas?
Birmingham's slightly negative reputation masks the editing buzz in many city centre areas and the pleasant rolling suburbs of family homes that are found a little further beyond. The Jewellery Quarter is popular with artists and young professionals and is just a stone's throw from some of Birmingham City Centre's most popular restaurants and bars. The recent improvements to transportation in Birmingham city centre, including the newly extended tram network have made living in the city centre without a car a much more realistic proposition. This means that it's easier to consider older flats which come without dedicated parking facilities than it once was. This may well lead to a small price surge in city centre accommodation if it hasn't already.
Further afield from the city centre, commuter areas such as Four Oaks have seen improve train services in recent years which have also contributed to a minor increase in house prices. Further significant improvements to Birmingham's transport infrastructure planned for the next decade or so could also help to significAntly lift prices.
What else is happening in the Birmingham property market
As in many other UK cities, student accommodation is playing an increasingly important role on the Birmingham property scene. Many landlords are focussing on the student rental market and purpose built private student accommodation is becoming an increasingly common sight on the city's streets. Birmingham's universities have a strong in terminational reputation and this is helping to fuel demand for student housing.
This trend is also helping to push up the price of family homes. As more and more family accommodation is converted into student housing, the supply of housing is becoming squeezed at a time when demand is going up. Families are remaining in the private rented sector for longer than they did previously as the general increase in house prices, coupled to tighter mortgage lending regulations, makes it ever more difficult for them to take their first step onto the housing ladder. It's possible that large amounts of new housing will be required to tackle this problem.
The High Speed two factor
Birmingham will be the first UK city to be connected to London by the new High Speed Two rail line. This will cut the journey time between the two cities to just over an hour and could make Birmingham into a London commuter town. If journey times are reasonable and fares are relatively affordable then it is possible that some London workers will look to Birmingham and its relatively affordable housing prices once the line opens in the later-2020s. This possibility is reliant on London housing prices remaining as high as there currently are. There are a number of political and economic scenarios which could change the outlook for house prices in Birmingham and the South East of England.
Political factors - Brexit
It seems almost impossible to talk about any issue these days without referencing Brexit. Unfortunately, Birmingham house prices are no exception to this rule. The uncertainty caused by Brexit is placing a small drag on the economy and housing market at the moment. Until we know the kind of deal the UK will end up with, it's difficult to predict what the long term outlook for the housing market will actually be. Brexit could provide a stimulus to the UK economy that will kick-start housing growth in the 2020s. On the other hand, it could cut some key trade links which will give the UK major economic problems to contend with as the new decade dawns.
It's also worth taking time to consider more general background factors. A recession will naturally hit demand for housing and could lead to a dip in Birmingham property prices. Small dips like these are a standard part of the property market and should be taken into account by all property buyers. There's also the possibility of other political events, infrastructure announcements and building projects having their own impact on housing prices in the city.
Whilst the property market in Birmingham has been fairly quiet in recent years, the large number of projects planned for the next decade or so mean that the city has plenty of growth opportunities to look forward to in the coming decade. A number of background factors make this hard to predict accurately but the general outlook for the city appears to be positive.