Birmingham's residential property investment market has continued to flourish, despite the slowdown in the housing market.
New research shows that potential remains for significant growth in the investment sector for many years to come.
The report, from developer Crosby Homes ( Special Projects) and selling agent Knight Frank, highlights regional population trends, the growth in professional services and, ironically, current uncertainty in the housing market as key drivers in the continuing growth of the private rental sector.
"While it had almost become accepted wisdom that city populations are in decline, the statistics for Birmingham tell a different story," said David Fenton of Knight Frank.
"Not only has the overall population risen over the past decade, with a further 100,000 increase due by 2025, but the critical 20-44 year old bracket is growing equally rapidly.
"Within 20 years, this sector - which accounts for the bulk of private tenants - will increase by more than 10 per cent to more than 400,000."
Keith Pepperdine, managing director of Crosby Homes (Special Projects), added: "We are witnessing seismic shifts in living patterns and household structures.
"And while the social impact of such change is a matter of ongoing debate, the outlook for residential property investors is undoubtedly very strong.
"The number of people fitting the archetypal 'private tenant' profile is set to rise dramatically in Birmingham over the next two decades, particularly in and around the city's central core."
The new research reveals marked age differences between tenants and owner occupiers in Birmingham's existing city living developments, with 20 to 35-year-olds accounting for 80 per cent of tenants, whereas owner occupiers are mainly from the 30 to 40-year-old age bracket.
More particularly, the reports states "furnished one bedroom apartments are particularly popular, with the majority of tenants being single or cohabiting.
Owner-occupiers are seeking two-bedroom units.
Mr Fenton said: "As house price inflation slowed and the opportunity for speculative investments and quick returns declined, shorter-term investors became less active, allowing owner occupiers and the longer-sighted investor a chance to return to the market.
"The early signs in 2005 are that the speculative and short-term investor forms just seven per cent and three per cent of the investment market, a marked drop from 2001 when they accounted for 35 per cent and 16 per cent of activity respectively."
Meanwhile, Crosby Homes has developed Southside, a mixed-use project combining prime commercial accommodation with more than 460 quality apartments.
The development capitalises on the resurgence of Hurst Street, with its bustling Arcadian Centre, Chinese Quarter and close proximity to the Bullring.
"This is a rapidly-emerging area of the city, offering potential for capital growth as well as immediate rental returns," said Mr Pepperdine.
"Southside is set to act as a catalyst for development and, consequently, investors and owner-occupiers alike have been very active."