Why do Chinese investors like Birmingham so much? According to specialists operating in the Hong Kong and South China markets, the answer is: because it's cheap, and not far from London.

Being cheaper than Manchester — and closer to London than Manchester — are major reasons for Chinese investors to look at the city, the South China Morning Post reports.

Demand from Chinese investors for Birmingham properties surged by 65% in the first half of this year for one firm, one agent told the paper.

The majority of Chinese buyers are acquiring city apartments as investments, unlike Chinese purchasers in London who expect a family member to live there. Just a quarter of buyers in Birmingham expect to live in the apartment, the report stated.

The appeal of rental income at a relatively low entrance price is striking if London and Hong Kong costs are compared. A Birmingham apartment might cost between HK$2M and HK$3M — a fraction of the HK$10M or more it would cost in Hong Kong, and about one-third of the entrance fee in London.

“To us, Birmingham is a lot more exciting than Manchester, because it is much cheaper … it’s not seen as much developed and it is closer to London,” the South China Morning Post quoted one agent saying.

Last month Chinese-based Birmingham developer PGC Capital revealed the backgrounds of some of the investors exploring the city. These included a private bank, a financial services platform and the owner of a chain of tea shops.