10 Best Areas to Invest in Birmingham 

Is Birmingham the UK’s next big property goldmine?

Birmingham was ranked as the fastest-growing city in the UK for property prices between 2024 and 2028. 

With a predicted rise of almost 20% during this period, Birmingham is leaving other cities behind. But why?

The city’s unstoppable growth is owed to its booming business hubs, massive regeneration projects, and strong rental demand. 

This blog will explore the best places you can consider to invest in Birmingham, and why this is the perfect moment for property investors to stake their claim. 

Why invest in Birmingham property investment?

With property prices forecasted to grow by nearly 20%, Birmingham is set to outperform every other city in the UK. The city’s rental yields are also highly competitive, with average rent for flats or maisonettes rising by 9% and 8.1% for detached properties, as per Office of National Statistics.

Birmingham’s property market is on fire, and 2025 is the perfect time to invest. With an average house price of £240,000 as of late 2024, the city offers an affordable entry point compared to Great Britain’s average of £295,000. 

Then, there is the ever-growing demand for rentals. The average rent grew to £1,029 in November 2024-a good increase of 8.7% year over year. Speaking of yields, the one-bedroom apartments present the best bargain with 9.3% in increased rents.

Moreover, the constant growth in the value of property in Birmingham speaks volumes. With its major developments like HS2, the Octagon, and BBC relocation, Birmingham is one of the best options for property investment in 2025 and beyond. 

Best Buy to Let Areas in Birmingham

Birmingham, with its high-level projects and increasing businesses, has ongoing and upcoming development projects, such as residential and mixed-use developments, which drive demand for rental properties.

As such, the following are the 10 best buy-to-let areas in Birmingham:

1. Digbeth

Digbeth is home to an amazing creative industry, including the iconic Custard Factory, which has seen a surge in independent businesses and creative spaces. Digbeth’s proximity to the future Curzon Street Station (HS2), expected to enhance connectivity with London, is one of its biggest advantages. Digbeth was also named one of the ‘best places to live in the Midlands’ by The Times last year.

The district is also going through transformations, with developments such as Stephen Knight’s Digbeth Loc Studios and the refurbishment of Typhoo Wharf, set to anchor the BBC’s media presence by 2027. The ongoing Eastside Metro extension will improve accessibility, while a surge in residential projects, including Glasswater Locks and several other large-scale developments, promises to bring thousands of new residents.

Average rental yield: 6-7%

Average property price: £286,000

2. Jewellery Quarter 

Jewellery Quarter approximately accounts for 40% of all UK jewellery production. The area is undergoing continuous transformation, with projects such as the £125 million St. Paul’s Quarter development, which will add 305 new homes and nearly 100,000 sq. ft of commercial, retail, and leisure space. Additionally, the Jewellery Quarter’s central location—just 15 minutes from Birmingham City Centre—offers excellent connectivity, driving demand for rental properties.

Average rental yield: 6-7% and 7.1% for two-bedroom apartments 

Average property price: £244,288

3. Birmingham city centre

The Big City Plan is Birmingham’s most ambitious urban regeneration project over the next 20 years. It includes the creation of over 50,000+ jobs, and 5,000+ homes, creating new sustainable neighborhoods, such as Greater Icknield and the Eastern Growth Corridor, which are expected to attract young professionals, students, and families.

Another transformation in Birmingham, the £1.2 billion Paradise redevelopment is slated to complete in 2025. This development includes 370 build-to-rent homes, with a focus on creating a mixed-use neighborhood. Birmingham’s position as a key hub for the HS2 railway project, which will drastically reduce travel time to London, opening up further property development opportunities around key stations, especially Curzon Street.

Average rental yield: 5.1%

Average property price: £219,000

4. Selly Oak

Selly Oak, located in the B29 postcode area of Birmingham, stands out as one of the best buy-to-let hotspots for investors. Its prime location, close to the University of Birmingham and Queen Elizabeth Hospital, makes it highly attractive for buy-to-let opportunities, particularly in the student accommodation sector. The area is home to a high volume of students, with nearly 84,000 attending the University of Birmingham. Although university halls are an option for first-year students, the majority prefer to rent privately in their subsequent years. 

Looking ahead, Selly Oak will see continued investment in the university district, including the development of additional student accommodation.

Average rental yield: 7-8%

Average property price: £225,000

5. Eastside

With £724 million being invested in the HS2 infrastructure alone, the area will see 36,000 new jobs and 4,000 new homes. 

In addition to HS2, the Eastside Metro extension will provide better connectivity to Digbeth and the city center. The Eastside Locks development, one of the largest regeneration schemes in the city, will witness new spaces. In 2023, the Glasswater Locks development in Eastside was the largest residential project with 762 homes being built.  In fact, Eastside had 375 residential completions in 2023, and over 1,400 homes under construction. 

Average property price: £203,981

Average rental yield: 5.72%

6. Erdington

Erdington, located just north of Birmingham city center, is emerging as one of the best buy-to-let investment areas in the region. Erdington offers a huge cost advantage for investors, with average property prices around £163,000, which are 30-40% lower than those in Birmingham city center. 

The area’s proximity to Birmingham’s city center makes it an attractive location for students who want affordable accommodation close to the university district. Additionally, with a population of 23,000 residents, Erdington is an appealing area for families who want affordable living options without being far from the city’s amenities and job opportunities.

Average property price: £163,000

Average rental yield: 4–5%

7. Harborne

Harborne is an attractive suburb in Birmingham, which is also experiencing development projects. 

A boutique luxury development featuring four-bedroom Victorian-style houses, with prices starting from £775,000. Completion is anticipated in spring 2025. A proposed residential project at 334-340 High Street and 8-22 Harborne Park Road, involving the redevelopment of existing apartments to improve living conditions, with the project being in the proposal stage. 

Over the last two years, 221 properties were sold, with the average price landing at £3,810 per square meter. Most homes fell between £3,240 and £4,520 per square meter, but a few stood out, going well above £4,520, clear markers of the area’s premium spots. High Street offers more affordable options at around £1,935 per square meter, while High Brow tops the charts at £4,958.

Average property price: £321,945

Average rental yield: 4.48%

8. Moseley and Kings Heath

The reopening of the Camp Hill railway line, with stations at Moseley Village and Kings Heath scheduled for 2025, is set to significantly enhance connectivity to Birmingham city centre. This development is anticipated to boost property demand and values, as improved transport links typically attract tenants seeking convenient commutes. 

Complementing this, the ‘Places for People’ initiative aims to enhance the local environment through the creation of Low Traffic Neighbourhoods (LTNs). The updated delivery plan for Kings Heath and Moseley includes measures to improve pedestrian zones and reduce traffic congestion, with implementation expected between July and October 2025. 

The presence of reputable schools further enhances its desirability for families seeking quality education options. As of now, the average price for a detached house in Moseley is £559,409, with flats averaging £164,530. 

Average property price: Moseley: £324,565, Kings Heath: £260,918

Average rental yield: 5.5%-5.7%

9. Edgbaston 

One of the critical factors contributing to Edgbaston’s appeal is the new residential developments currently in the pipeline, such as the proposed four-storey block on Harrisons Road, comprising 28 apartments and four townhouses. These development plans are in line with the city’s requirement for modern housing, especially for young professionals and students. Although opposed by some locals, these projects were given the green light from the council and the relevant stakeholders.

Besides, the inclusions of sustainable elements like green roofs and landscaping schemes underline Edgbaston’s commitment to eco-friendly urban living. Located close to Birmingham city center, Edgbaston also has residents looking for high-quality housing due to the nearby University of Birmingham.

Average property price: £365,000

Average rental yield: 5.4%

10. Solihull 

The expansion of West Midland Metro will improve East Birmingham-Solihull, ensuring easy connectivity of main locations in the areas comprising Birmingham Airport, National Exhibition Centre, and HS2 Birmingham Interchange station.

From an investment perspective, the property market in Solihull is growing. The average price of a house was £364,000 in October 2024, up 5.0% from the same month last year. Private rents also increased significantly, with the average monthly rent reaching £1,234 in November 2024, which is 13.0% higher than in November 2023. Meanwhile, looking to the future, the projection for Solihull’s property market remains positive, with predictions of a 4% increase in average new seller asking prices in 2025.

Average property price: £364,000

Average rental yield: £1,234 per month

Current state of real estate investment Birmingham 

Birmingham’s real estate market presents a promising state for investors looking for opportunities in 2025, as per official data from Office of National Statistics:

1. House prices on the rise

The average house price in Birmingham was £240,000 in October 2024, reflecting a 2.9% increase from the previous year. While this is lower than the average rise seen across the West Midlands, it still signals a steady appreciation in property value.

2. Increase in rent fuels investment opportunities 

Private rents in Birmingham surged by 8.7% year-over-year, reaching £1,029 in November 2024. This uptick aligns with the wider regional growth, making Birmingham a promising location for buy-to-let investors seeking reliable rental income. With consistent rent rises, investors can expect a stable and growing return on investment.

3. First-time buyer market 

First-time buyers in Birmingham paid an average of £212,000 in October 2024, up 3.3% from the previous year. This growth, while moderate, indicates a healthy demand for entry-level properties, making Birmingham a strong contender for both new homeowners and investors targeting affordable rental properties.

4. Mortgage buyers show confidence 

The average price for homes bought with a mortgage in Birmingham rose by 2.9% to £248,000 in October 2024. This is in line with broader trends, suggesting confidence in the local market, despite broader economic challenges. This makes Birmingham an appealing market for investors who want to tap into a financially stable property environment.

5. Flats and terraced homes see growth

Among property types, flats saw a price rise of 4.1%, while terraced homes appreciated by 2.2%. With relatively affordable prices compared to other areas, flats in particular present an opportunity for investors looking for budget-friendly yet promising assets.

What are the property investment options in the UK?

With the city’s growing demand for flexible housing options, it’s an ideal location for various types of real estate investment. Pluxa Property’s tailored services align perfectly with Birmingham’s market conditions, offering high returns:

1. B2SA

Tourism and business are growing sectors in Birmingham, so the demand for short-term lets is very high. Because of the presence of large events, conferences, and business hubs, this area will have a higher demand for serviced accommodation. Pluxa’s Buy-to-Serviced-Accommodation plan invests in luxury apartments located in prime locations that provide up to 15% rental yields and over £1,000 in monthly cash flow. With continued growth in Birmingham’s property values, your B2SA investment could deliver not only attractive short-term returns but long-term gains as well.

2. R2SA

Moreover, the Rent-to-Serviced Accommodation model offered by Pluxa will be ideal for those who like to take less risk. With Birmingham’s vibrant city center and proximity to corporate centers, it is the right place to let out properties for medium- to long-term corporate rentals. With our sister company, Pluxa Stays, we book corporate stays with regular guaranteed income. Investors can achieve consistent income by investing in this model-from only £10k-and reduce their risk while capitalizing on the increasing demand for serviced accommodation in Birmingham.

3. BRRR

With Birmingham’s excellent private rental market, the BRRR strategy can be one of the most potent tools for investors seeking portfolio growth. Pluxa’s BRRRR services will help investors acquire undervalued properties in highly sought-after areas, refurbish them, and secure long-term rental income. As house prices keep rising, refurbishing and refinancing properties in Birmingham can provide great equity to allow further investments with minimum initial capital. Over 40 years of Pluxa experience assure the best deals for investors, save their time, and maximize returns.

Best areas for rental properties in Birmingham

With a forecasted 19.9% rental growth from 2024 to 2028 and continued redevelopment initiatives, now is a prime time to explore the best areas for rental property investments in this thriving city. Below are the top six locations in Birmingham that offer profitable opportunities for property investors:

1. Jewellery Quarter 

The Jewellery Quarter is the most iconic neighborhood in Birmingham, complete with rich history and stylish new developments. 

It’s a highly attractive location for professionals and young people, making demand in the area very strong. Along with predicted rental growth, the area achieves an average rental yield of 6.2%, bringing long-term return. 

Historically the heart of Birmingham’s jewellery trade, the Jewellery Quarter is now known for its stylish modern apartments. 

In 2025, developments in the Jewellery Quarter will continue to focus on high-end residential projects that cater to the growing demand for luxury living.

Average property price: £249,379

Average rental yield: 6.2%

2. Smethwick 

With its remarkable 6.8% rental yield, Smethwick offers great value for money compared to the rest of Birmingham. 

The price growth in the area, together with affordability, makes Smethwick attractive for investors seeking lower-entry properties with strong yields. 

A major development is the ongoing expansion of the Midland Metro and plans for new residential communities, which will provide modern housing options tailored to a range of tenants, from young professionals to families.

Average property price: £187,871

Average rental yield: 6.8%

3. Bournville 

Bournville is community-driven, offering rental opportunities specifically for families. This proximity, combined with Cadbury’s headquarters and good transportation links in and out of Birmingham’s city centre, is going to make this an attractive offering to renters. 

Flats also come in at an average relatively low property price compared with other parts of Birmingham, and one could expect a solid rental yield of 6.1% from this area for investors. 

This, in turn, has prompted further development in the area, likely to continue to drive up prices over the next few years by as. 

Average property price: £270,244

Average rental yield: 6.1%

4. Sutton Coldfield 

Sutton Coldfield, or officially known as The Royal Town of Sutton Coldfield, linking Birmingham with Lichfield, is one of its major selling points. 

Major upgrading to road networks is in process, especially on the A38 and M6 corridors, which directly benefits the accessibility to Sutton Coldfield. Additionally, this area has the highest number of primary and secondary schools locally, totaling 35. 

And the most expensive home in this suburb is priced at £7.5 million, hence making it the most expensive property in Birmingham! 

But despite its luxury, the greatest attraction in Sutton Coldfield and Four Oaks is its stunning park which sprawls across 2,418 acres.

Average property price: £270,244

Average rental yield: 6.1%

5. Gun Quarter

The Gun Quarter is often considered the ‘sister’ of the more famous Jewellery Quarter and is situated between Birmingham’s city centre and the Jewellery Quarter. 

Currently, the area is undergoing significant regeneration, with improvements in connectivity and enhancing its reputation as a foodie destination. 

The Gun Quarter can be broadly divided into two areas: the residential areas closer to the Jewellery Quarter and a student-centric sector, benefiting from its proximity to Aston University and Eastside.

The ongoing construction and development projects have actually transformed the skyline of the Gun Quarter. In particular, HS2 will raise its profile significantly. 

Once the Curzon Station is completed, the Gun Quarter will be one of the closest neighborhoods, thus allowing easy connectivity for both residents and businesses.

Average property price: £251,144Average rental yield: 7.63%

The Jewellery Quarter is the most iconic neighborhood in Birmingham, complete with rich history and style.

How are rental yields in Birmingham compared to other UK cities

Birmingham’s rental yields are notably competitive compared to other UK cities, making it an attractive option for property investors. Here’s a comparison based on the available data:

Rental Yields in Birmingham

Average Rental Yield: Ranges from 4% to 9.3%, depending on the area and property type.

Top Areas:

• Selly Oak: 7-8%
• Digbeth: 6-7%
• Jewellery Quarter: 6-7%
• Eastside: 5.72%
• Birmingham City Centre: 5.1%

Comparison with Other UK Cities

While specific rental yield figures for other cities were not detailed in the search results, Birmingham’s yields are generally considered strong, especially in comparison to cities like London, where yields can be lower due to higher property prices. 

For instance:

• London: Average rental yields often hover around 3-5%, primarily due to high property prices.
• Manchester: Typically offers yields between 5-7%, which is competitive but still lower than some of Birmingham’s best areas.
• Liverpool: Known for higher yields, often around 7-9%, but with varying property price dynamics.

Conclusion

Birmingham stands out with its combination of affordable property prices and strong rental yields, particularly in emerging neighbourhoods. 

This makes it a prime location for buy-to-let investments, especially as the city grows and develops.