Landlords still want to invest in Birmingham
Rental increases in the West Midlands were double the national average in the 12 months to October 2018, according to the latest figures published by the Office for National Statistics (ONS).
While London is the only region in the country experiencing a fall in its private rental property market, the rest of the country has seen an increase in rental growth, averaging at 0.9%. In the West Midlands that figure was 1.8%.
The West Midlands figures are testament to the region’s vibrancy as it continues to attract huge infrastructure projects, such as HS2, and the influx of national businesses and organisations to the area, including HSBC and HMRC. These are having a particular impact on the Birmingham city centre market, which is seeing an increase in the number of apartments being developed. Of course, other exciting events, such as the Commonwealth Games in 2022 and Coventry hosting the City of Culture in 2021, also help to drive the buoyancy in the private housing rental market.
We know that the West Midlands is an increasingly attractive destination for ambitious people who want to leave London – with its eyewatering house prices – and move somewhere that is vibrant and more affordable.
The most recent ONS figures showed that In the West Midlands, 16,370 people moved from London to the West Midlands, with 12,700 going to the capital – a net gain of 3,670. In Birmingham there were 7,620 people who moved from London last year, which made it the most popular destination in England. With 6,690 moving in the opposite direction, it left a net gain of 660.
It’s not surprising, therefore that the rental market is buoyant and continues to be a good investment for landlords.
So, while we celebrate the fact that the area is attracting healthy rental growth, it’s worth looking at where rental prices might be in the next 12-24 months.
The proposed lettings fee ban, which is going through Parliament at the moment, will mean that tenants will no longer be charged for such things as application, guarantor and administration fees. In some cases – particularly in London – these fees were running to hundreds of pounds, which is frankly unaffordable for many tenants who also have to find a month’s rent and a security deposit in advance, too.
This will inevitably lead to rent increases across England, reflecting the experience in Scotland, when similar legislation was introduced in 2012. While these changes will change the rental landscape, the relationship between landlord, agent and tenant will continue to be important.
Landlords will continue to rely on agents because they will need to make sure that they have the right tenant in their properties and to ensure their assets are managed properly day to say.
Although it is inevitable that the market will adjust when the expected changes are introduced, rental properties will undoubtedly continue to provide a good return on investment for those who choose to enter the buy-to-let market. The market in Birmingham is strong and demand for good quality properties shows no sign of abating in the city centre and surrounding areas.
To speak to the rental experts at James Laurence about how it can help you achieve maximum ROI on your rental property, telephone: 0121 456 5454 or email: firstname.lastname@example.org