Bright Future for Birmingham as Strong Population and Economic Growth

Posted by Colliers on 29th October 2021 -

Oliver Kolodseike, a Director in Colliers’ Research & Forecasting team, looks at how Birmingham’s post-pandemic recovery has been spurred on by relatively affordable housing, innovative business creation and strong higher education credentials.

Earlier this month I had the pleasure of presenting my latest economic overview to a group of Colliers’ key clients in a venue overlooking the Birmingham skyline. The audience was made up mainly of bankers who had gathered to hear Colliers’ take on how Birmingham was holding up as a major UK city in comparison to its counterparts in the UK and across Europe. 

When comparing the pandemic to the global financial crisis, there was a strong decline in UK GDP, however recovery was both stronger and quicker. This is also true when comparing the UK regional economic recovery to its European counterparts. Birmingham is one UK city that is demonstrating all the right fundamentals for a strong recovery. These include:

• Growing population – Encouragingly, Birmingham is not only predicted to benefit from overall population growth, but also from a growing working-age population, which is a key driver of economic growth. This contrasts with shrinking working-age populations across Barcelona, Frankfurt, Milan, Paris and Porto.  

• Attractive house prices and affordable rents – The average house price in Birmingham stands at £206,000 which is below other regional cities such as Manchester (£208,000), Leeds (£215,000), York (£288,000), and Edinburgh (£309,000). Likewise, Birmingham outperforms the likes of Bristol, Cardiff, Edinburgh, and Manchester in terms of rental affordability. 

• Strong higher education credentials – with high ranking universities attracting and retaining talent in the city, The University of Birmingham ranks in the top 20 UK universities in the University League Tables 2022, scoring particularly well in the graduate prospects category. Access to talent is key to the city’s success. 

• Lots of mixed use development underway in the city – A recent example is a £260 million canal side scheme in Digbeth by Cole Waterhouse which will include almost 1,000 residential units, 65,000 sq ft of flexible commercial space, a hotel, roof gardens, and car parking spaces.

The overarching message is  that Birmingham’s recovery will be driven by its growing population and economic strength and is set to perform better than the German cities of Munich and Hamburg.