Birmingham has dropped down the world cost of living league from 66th to 125th as expenditure in emerging eastern cities continues to soar.
The impact of the recession and the fall of the pound against the dollar have been identified as the main reasons why the city has become comparatively cheaper to live in than Caracas, in Venezuela, Tehran, in Iran, and Ammam, in Jordan.
Mike Loftus, manager of Locate in Birmingham, said the research shows Birmingham offers good value. He said: “If Birmingham is seen as a cost effective location with the quality of opportunity it presents then that has to be a good thing.
“Our aim has always been to be seen as a place which offers a competitive cost and a good quality of life with good facilities and staff.”
Tokyo has knocked Moscow off the top spot to become the world’s most expensive city for expatriates, according to the 2009 Cost of Living Survey from Mercer. Osaka is in second position, up nine places since last year, whereas Moscow is now in third place. Geneva climbs four places to fourth position and Hong Kong moves up one to reach fifth.
Johannesburg has replaced Asunción in Paraguay as the least expensive city in the ranking.
“The decline of rental prices, coupled with the fall in the value of British pound against the US dollar, have caused London to plummet in the rankings,” said Nathalie Constantin-Métral, a senior researcher at Mercer.
In Mercer’s survey, New York is used as the base city for the index and scores 100 points. Cities are compared against New York and currency movements are measured against the US dollar.
Birmingham scores 64 points, compared to 85.4 points last year.
As well as the fluctuations in currency values, the cost of living – and doing business – has also fallen in the city due to the drop in residential property prices and commercial property capital and rental values.
While the headline commercial rent in the city was around £33 per sq ft last year, this has fallen to around the £30 mark or below in recent months.
With the amount of available grade A stock in the marketplace, Birmingham is becoming an increasingly attractive proposition for inward investment and is believed to be in the running in the battle to entice the Ministry of Justice out of London which would bring thousands of civil servant posts to the city.
Tokyo scores 143.7 points and is nearly three times as costly as Johannesburg with an index score of 49.6.