Is the UK’s “second city” going to be the place to invest in 2018? Alongside Manchester and Liverpool, Birmingham joins the Northern Powerhouse.

With its affordability and future returns potential, Birmingham is a promising option for both first-time buyers and buy-to-let landlords looking for their next investment.

Recent reports show that rental returns in the city centre have increased by 24% over the past 12 months, making average yield in the area 4.25%.

Looking at capital gains growth, between 2015 and 2019 the report estimates the figure to be around 17%, while house prices in the city grew by 5.2% from 2015 to 2016.

Meanwhile, research by PwC and Demos showed that Birmingham is the fastest improving place in the country to live and work, in a survey that looked at factors such as transport, work-life balance inequality and health.

An ideal position

The city is set to benefit from investment from the 20-year Big City Plan, which is “a vision to encourage and support Birmingham’s continuing transformation into a world class city centre,” according to Birmingham City Council.

The plan includes the creation of more than 50,000 new jobs, providing more than 5,000 new homes, and contributing £2.1bn to the economy each year.

With five universities across the city, the number of students in the region keeps demand for properties high, along with a recent influx of young professionals to the area.

You can read more about what makes Birmingham an investment hotspot here.