This is the second of a series of research reports from Gerald Eve looking into the UK’s major regional Build To Rent Hubs, following our successful review of the Manchester market in September 2021.
Instead of relying on 3rd party databases and planning portals which can provide a distorted view of the development pipeline, Gerald Eve inspected every consented site in Birmingham to assess feasibility and actual progress on site. We believe this approach provides a more accurate supply side picture which when combined with a borough-by-borough assessment of demographics and housing need, delivers a clearer picture of the likely future market dynamics and investment characteristics of the city.
Total investment in Birmingham’s Build To Rent sector reached £553m in 2021, representing a 40% increase compared to 2020 and placing the city second only to London in terms of investment volumes. The six funding transactions completed in 2021 represent an additional 2,330 units entering the development pipeline taking the total number of units under construction to 4,930 units over 12 schemes with completions scheduled from mid-2022 to 2026.
This level of Build To Rent supply may initially seem daunting but must be considered in the context of historic and forecast housing need. Not once in the last decade (2011-2021) has Birmingham reached its housing targets with an average of 842 units delivered per annum during this period creating a cumulative deficit of 14,230 dwellings. In addition to the current deficit, Birmingham is forecast to require an additional 25,850 units between 2022 and 2031 to keep up with the 3.5% population growth forecast over the same period.
Birmingham has also experienced significant house price growth averaging 9.6% annually to June 2021 making it increasingly unaffordable to the city’s high proportion of younger rental hubs and transient renters. This rapid growth has increased average house prices in Birmingham to 7.6 times the median wage. The City clearly needs more housing delivery and the Build To Rent sector is well positioned to help deliver this over the next few years.
Read the full report if you would like to find out more about the Birmingham Build To Rent market or would like a more granular look into an of the schemes, boroughs or locations discussed in this research, please do not hesitate to contact one of the Build To Rent team.
