Birmingham’s professional services boom puts fresh focus on mortgages and housing

Birmingham’s professional services boom is putting fresh focus on the city’s mortgage and housing markets, as rapid jobs growth reshapes demand across the West Midlands Combined Authority (WMCA).

According to a new report by Oxford Economics, the WMCA has seen the fastest gain in professional services jobs of any combined authority, with Birmingham firmly in the lead. Employment in the sector grew by an average of 2.8% per year between 2020 and 2025, compared with 1.4% across the UK. This acceleration is transforming the region’s economic profile and influencing how and where people want to live – and how they need to borrow.

A new generation of borrowers

The city’s outperformance has been “driven by the legal amd accounting activities subsector, which made the largest contribution to GVA growth, while head office activities created the greatest number of professional jobs over the period, at 15,000,” said Associate Director Liam Sides and Lead Economist Hugo Bessis.

For lenders and intermediaries, this signals a growing base of relatively well-paid, often city-centre-based professionals in their 20s to 40s whose borrowing patterns differ from the traditional West Midlands borrower.

This cohort is likely to support stronger demand for higher-LTV products. Many are drawn to Birmingham as a lower-cost alternative to London but still face meaningful deposit hurdles for city-centre apartments and well-connected suburban homes. The expansion of law, accountancy and consultancy firms — often with remuneration structures involving bonuses, profit shares or partnership drawings — is also expected to drive demand for flexible and specialist underwriting, including offset products, flexible repayment options and mortgages suited to variable or non-standard income.

Birmingham’s growth story extends beyond white-collar expansion. Oxford Economics highlights the WMCA’s strong manufacturing specialisation, particularly in motor vehicles and defence, as a major driver of inward investment.

In 2023, the region’s inward foreign direct investment (FDI) stock exceeded £90 billion, the highest of any UK city-region. Total investment has grown at an average annual rate of 13.2% since 2015. This sustained influx of capital underpins employment and income growth, reinforcing housing demand across both owner-occupied and rental sectors.

Implications for the mortgage market

This investment carries several implications for mortgage activity:

• It supports job security for existing homeowners, strengthening affordability and reducing the likelihood of distress or default.

• It attracts new workers from the UK and overseas who initially boost demand for private rentals before transitioning into homeownership, sustaining purchase and remortgage flows.

• Regeneration schemes and infrastructure improvements linked to investment help lift values in targeted neighbourhoods, creating future hotspots for remortgage, capital-raising and later-life lending.

Across Birmingham, Coventry, Wolverhampton and the wider WMCA, these dynamics position the region as a key battleground for lenders seeking growth outside London and the South East. The combination of a deepening professional services base and long-standing industrial strength supports a wide range of mortgage propositions, from mainstream first-time buyer lending to specialist buy-to-let and complex income cases.

First-time buyers and buy-to-let

First-time buyer activity is likely to remain robust as graduates and young professionals choose Birmingham for strong career prospects and relatively affordable housing. This reinforces the importance of shared ownership, low-deposit and guarantor-assisted products, as well as lender appetite for new-build schemes around key employment hubs.

At the same time, solid white-collar job growth and an expanding student and young professional population underpin the case for professional buy-to-let. Limited-company structures and higher-quality HMOs capable of commanding premium rents near business districts and transport links are expected to remain attractive.

Rising values in employment-rich areas are also likely to generate remortgage opportunities over time. As homeowners build equity, demand for capital-raising to fund home improvements, extensions or debt consolidation is likely to grow. Lenders offering competitive remortgage incentives, streamlined switching processes and strong broker support are well positioned to benefit.

Balancing growth versus risk

Despite positive headline figures, the report also highlights potential risks. The WMCA remains more exposed than many regions to global headwinds. While manufacturing attracts investment, it is also vulnerable to high energy costs, elevated labour costs and persistent skills shortages, all of which can affect productivity and competitiveness.

For the mortgage industry, this creates a nuanced risk outlook. Any downturn in automotive or defence manufacturing could affect specific localities, impacting employment and house prices in those areas. Underwriters and brokers will need to remain alert to sector-specific and geographic risk, particularly where borrowers’ incomes are tied to exposed industries.

At the same time, the expansion of professional services provides diversification that may help cushion the region from the sharp housing corrections associated with past industrial downturns.

If the Oxford Economics outlook proves accurate, Birmingham’s twin engines of professional services and advanced manufacturing are set to keep the city at the forefront of regional growth — and firmly on the radar of lenders and brokers looking to build sustainable mortgage business beyond the capital.