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A high yielding property hotspot offering strong growth potential
• Discover why now is the time to invest
• Liverpool vs London
• Location guide
expe
rien
cein
vest
.com
Liverpool
2020
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Contents3
Breaking News
Location Overview
Liverpool vs London
£5.5 Billion Reasons to Invest
Why Invest in Liverpool?
What our Clients say…
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6-7
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Breaking News
‘Urban renaissance’ draws UK residents back to city centres
Liverpool among top 10 UK cities for landlords
3 Liverpool postcodes named in top 10 areas for buy-to-let returns
The current generation of young people in the UK are bucking the trend set by their forebears and making a ‘rapid return’ to city-centre living, according to findings from the Centre for Cities.
Analysis of data from the Office for National Statistics shows that Liverpool has led the way in city-centre population growth. Between 2002 and 2015, the number of people living close to the centre of Liverpool increased by 181 per cent, from 9,100 to 25,600.
Compared to 30 years ago, many modern city centres have a lot more to offer residents, particularly students and young, affluent professionals.
The Centre for Cities analysis highlighted a 208 per cent increase in Liverpool’s city-centre student population between 2001 and 2011, with 6,300 more college and university attendees choosing to live there.
There are some exciting opportunities waiting to be seized. The need for desirable living space in popular, convenient locations means high occupancy levels, a low risk of void periods and a strong likelihood of healthy, consistent rental yields.
Liverpool has been identified as a strong option for property investors interested in entering the buy-to-let market in the UK.
In a new report produced by comparison website GoCompare, Liverpool was ranked fourth in the list of the ten best cities to be a landlord.
The index was compiled based on a number of key factors that contribute to a destination’s overall appeal to property investors, such as average prices, typical rental yields, the proportion of the population under the age of 35 and the number of new housing developments.
A new 2018 report by Totally Money listed three Liverpool postcodes among the top ten areas for UK buy-to-let investment, based on the rental yields available.
One of the key conclusions in the report was that locations with strong student populations offer good potential for investment returns.
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Liverpool is one of the UK’s most loved cities and boasts a rich cultural and historical heritage.
Named the European Capital of Culture in 2008, the city is home to the UNESCO World Heritage Waterfront – the Albert Docks - and is the country’s fifth most visited place by overseas tourists.
Liverpool’s city centre population is growing at record pace and with five world-class universities, billion-pound private investment projects and the largest number of start-up businesses in the UK, this buoyant city has emerged as a hotspot for property investors.
High demand, low supply
Liverpool’s property market has been undersupplied for many years which
has resulted in an influx of private investment.
The city centre population has grown at a faster pace than any other UK town or city however, the amount of people living in Liverpool has increased faster than the number of new homes being built.
Locations with large student populations often perform well for landlords and with over 57,000 students, Liverpool is home to one of the country’s biggest markets.
Over 66% of properties in Liverpool are privately rented with 50% of all properties occupied by young professionals. Liverpool has a flourishing property market and is widely considered as a UK buy-to-let property hotspot.
Location OverviewUK buy-to-let hotspot
Property prices expected to rise
by 19.3% between 2018-2022 (JLL)
66% of properties are privately
rented in the city centre
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Fastest growing city centre population.
The cost of renting projected to
increase by 17.6% between
2018-2022 (JLL)
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When it comes to investing in the UK property market, one of the key decisions buyers need to make is where to make their purchase.
There are many attractive locations to choose from. London is traditionally seen as the engine that drives growth in the nationwide housing market, but that doesn’t necessarily mean it is the best option for investors focusing on factors such as entry prices and rental yield.
Savvy buyers who do their research will find there is a lot of potential to make strong investment returns in other regions and cities around the UK,
where barriers to entry are much lower than in London.
One of the prime examples of this is Liverpool, a city with a thriving cultural scene, a strong student population and good prospects for growth in the local economy and housing market.
Here, we take a look at some of the key factors that make Liverpool a viable alternative to London for buy-to-let property investors.
Prices and yieldsLondon is often characterised as its very own property market, distinct from the UK as a whole. One of the key reasons for this is the capital’s high house prices, which are far in excess of the typical amounts paid to purchase homes in other regions.
According to the latest data from the Office for National Statistics (ONS), average house prices in London were £478,853 in May 2018, more than triple the £157,531 figure recorded for north-west England.
Recent research by comparison site Compare the Market offered an even more inflated average price for London property - £639,629, compared to Liverpool’s £223,910.
These lower entry prices will instantly make Liverpool a more attractive option than London for many investors. Moreover, property values are a key part of the equation to calculate rental yields, with lower buying costs contributing to higher average yields.
Recent reports have provided an insight into the sort of rental yields investors can expect to gain in Liverpool. A study by Go Compare ranking the best UK cities to be a landlord put Liverpool ahead of London for metrics including average yields and rental price growth.
Similarly, a report by Totally Money listed three Liverpool postcodes among the top ten areas for UK buy-to-let investment, based on the rental yields available.
London was revealed as one of the worst areas for rental returns, with yields as low as 1.5 percent - leading to five postcodes in the north of the city featuring in the bottom ten overall.
One of the key conclusions in the report was that locations with strong student populations offer good potential for investment returns.
Liverpool vs London - why the northern city has plenty to rival the capital
The Liverpool property market has many benefits over London for investors, including lower entry prices and the possibility of higher rental yields.
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£639,629 £223,910Average London property price
Average Liverpool property price
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Joe Gardiner, Totally Money’s head of brand and content, said:
“With students flocking to
university cities year after year and
looking for a place to live, it’s no
surprise the student market is a
dependable one for landlords. Since
so many students are looking for
accommodation, landlords may use
this as an opportunity to drum up
competition between them.”
Demand for housingA strong student population is one of the key characteristics of Liverpool that supports demand for rental property in the city.
This cultural hotspot in the north-west of England is also home to a growing business district, and therefore more workers looking for living space, as well as highly desirable areas such as the Baltic Triangle, which the Times last year singled out as the coolest place to live in Britain.
Liverpool’s strong appeal to renters means high occupancy levels and a low risk of void periods for buy-to-let property owners.
A February 2018 report from real estate consultancy JLL provided some numbers to highlight the desirability of Liverpool as a living destination. In 2001, the city’s population bottomed out at approximately 442,000, but steady growth since then has seen the population return to around the 500,000 mark.
JLL pointed out that institutional investors have recognised this trend, leading to particularly strong investment in the growing build-to-rent sector, which delivers property specifically for the private rental market. The firm also forecast that house prices in Liverpool will grow by four per cent in 2018 and by at least three per cent over the subsequent four years.
In contrast to Liverpool, London has recently experienced something of an exodus. The Resolution Foundation think tank published a report showing that more people - particularly from younger generations - are leaving the capital than arriving from the rest of the UK.
The number of people in their early
30s leaving London has reportedly
doubled since 2009, with high
property prices thought to be a
major contributing factor.
Knight Frank came to a similar conclusion after analysing ONS data, which indicated that high housing costs have contributed to record numbers of people leaving London to seek more affordable living elsewhere.
The figures showed that, during the year to June 2017, 336,000 people left the capital for other UK towns and cities, marking a 15 per cent annual increase. The city’s net outward migration figure increased by 55 per cent compared to 2012.
For investors seeking a combination of affordable entry prices and strong demand from tenants, it seems there is a lot to gain from looking beyond London.
Business and economic prospectsLocal business and economic trends are another important consideration for buy-to-let property investors, partly because they provide an insight into the reliability of demand from tenants and prospects for rental growth.
As far as Liverpool is concerned, there is clear cause for optimism on this front. Data from the Centre for Cities shows that, between 1998 and 2016, economic growth was faster in Liverpool than in many other major UK cities, including Manchester, Bristol, Leeds, Glasgow and Birmingham.
CityMetric highlighted a number of possible drivers of this trend, including Liverpool’s recent investment in cultural infrastructure, the opening of the Liverpool ONE shopping centre and the rapidly expanding student population.
As far as business growth is concerned, there have been positive developments including the December 2015 opening of the Enterprise Hub, a regional start-up support programme.
In July 2018, the Treasury announced a new funding agreement for the Liverpool city region that is expected to benefit local businesses, residents and the economy.
Robert Jenrick, exchequer secretary to the Treasury, said: “Since 2010 we’ve seen nearly 50,000 new jobs created in the Liverpool city region alone, and inward investment increased by six per cent in the north-west as a whole in the last year.
“Today’s announcement will build on this progress and provide greater flexibility for leaders to deliver the jobs, infrastructure and growth in productivity that will help secure the region’s place in the new economy.”
Is Liverpool a good place to invest in property? For property investors, these are positive signs. Combined with relatively low entry prices, good prospects for capital growth and steady demand from tenants, they paint a compelling picture of Liverpool as one of the UK’s most attractive and potentially lucrative buy-to-let investment destinations.
Liverpool’s city centre population growth
442,000 500,0002001 2017
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£5.5billion reasons to invest Investment in Liverpool and its 60-hectare historic docklands site has
become a regeneration centre, with plans for a mixed-use world class
quarter that attracts businesses and new residents alike.
again in 2017, with another 6,000 new businesses set to come to the city this year.
This sort of appetite for Liverpool as a centre of business is one of the main reasons for the growth and regeneration of the city that has been taking place in recent years, and with more demand for new workplaces and residences as a result, it makes sense that there are plans for this to continue for some time to come.
Liverpool WatersThe Liverpool Waters development at the docklands is set to be one of the biggest regenerations ever seen in the UK, with 2.3km of the city’s coast set to be transformed into an extension of the city centre Central Business District. Some £5 billion has been set aside for the project, which will see more than two million sq.m of mixed use floor space built in the years ahead.
The Waters development is made up of four distinct areas; Wirral Waters, Central Docks, Princess Dock and Northern Docks, each of which will bring home, work and life together in unique focused communities to give Liverpool’s
waterside a fantastic new edge that should attract businesses and residents alike for years to come.
When completed, the Liverpool Waters development will have more than 9,000 new homes, 315,000 sq.m of office space, 35,000 sq.m of conference rooms and hotel rooms, 27,000 sq.m of restaurants and cafes, as well as two parks and a cruise liner terminal, turning what was once an increasingly obsolete part of the city into something for everyone.
On top of the increased focus on residential, community, work and lifestyle centres, Liverpool Waters is also hopeful of delivering an all new boost to the infrastructure of the city. A new road network is being planned for increasing the links between the new development on the water and Central Business District, as well as the wider Merseyside region.
With such a focus being put on the investment in Liverpool, and the appetite for more development and business growth that appears to be in place in relation to the city, it seems clear that Merseyside will continue to grow for some time, and new communities such as Liverpool Waters will only help it to thrive.
Liverpool has emerged as a more prominent player in the north in recent times, as the city attempts to mirror growth seen in neighbouring Manchester over the course of the last half decade.
Schemes like the billion-pound plus reinventing of the Knowledge Quarter, providing fantastic collaborative opportunities between businesses and universities have helped Liverpool to put itself on the map as a growth city. But it’s not just the centre of the city itself that is now on the cusp of thriving.
One of Liverpool’s most iconic landmarks is its historic Albert Dock, which has been a feature of the city since 1846, when the city was thriving as an industrial port. Now, plans are in motion to reinvent the 60-hectare area as a mixed-use, world class quarter that will strive to bring together retail, offices and residential buildings to create a new community in an area that has long been crying out for something new.
Investment in Liverpool continues to growInvestment in Liverpool is one of the hottest places in the UK for regeneration at the moment, and with good reason.
As well as the rising student numbers that are flowing into the city thanks to the regeneration of the area, there has been a climb in the number of businesses coming to Liverpool, helping the Merseyside city become the fastest rising in terms of productivity in the UK outside London.
By making use of parts of the city that have been overlooked in recent years, local authorities are hoping to make the most of the momentum that has come from this growth, and keep it going for the next few years through new developments that create thriving communities.
In the past 12 months, Liverpool has also become one of the most prominent UK locations for start-up businesses. According to a report from DueDil, for 2016 as a whole, Liverpool saw the number of small businesses in the city expand by more than 21 per cent, and it’s expected that this will grow
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Why invest in
Liverpool is leading the way in terms of enhanced economic prospects for the whole of the UK at present, with the JLL research predicting house price growth in the city will accordingly exceed the national average during the next five years.
A 4.5 per cent uplift in value is forecast this year for Liverpool’s property market, exceeding the 1 per cent prediction for the nation as a whole. This is a trend that then continues in the coming years, with above-average growth expected until 2022.
At the same time, business in Liverpool is booming and employment growth is predicted to achieve a rate of 0.4 per cent per annum, with the corresponding level of attraction for the city forecast to flourish. More jobs means more people, which in turn means the need for more homes. It is a positive development that will only serve to benefit those entering property investment opportunities in Liverpool.
JLL’s report stated:
“Sales prices in the city centre increased during the course of 2017, up 5.1 per cent on the back of a lack of supply to meet the growing city centre demand. Looking forward, we forecast new development prices will rise strongly over the next five years in the resurgent city centre.”
This Liverpool investment news means that investors in the market will be faced with a growing array of options in the years to come, with more new developments coming to market to meet the city’s expanding needs.
Liverpool? 15
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