Transactions may have dipped in traditionally popular areas of the UK, but Liverpool stands firm as a great property investment city.
It joins other cities including Manchester and Sheffield as encouraging alternatives to London for investment. Its relatively low property prices and potential for high yields is proving to be of interest to selective investors looking to increase their portfolio in an area that looks set to get stronger in the near future.
Why Do Investors Like Liverpool?
With the political uncertainty caused by Brexit and the snap election in June this year, along with the hike in stamp duty last year, there is an air of caution in the property investment sector.
Prices in central London have increased considerably over the last few years, resulting in simple inaccessibility for many investors and buyers alike. With no bargains on offer in all the usual places, and a more cautious attitude, attention has turned to other areas.
Liverpool is one of the most attractive alternatives, with potential rental yields of 7%+. More than double that currently achievable in London.
Post Financial Crisis Catch-Up
Since the 2008 financial crisis, Liverpool has struggled to get back on its feet in terms of property prices. Other large cities like Leeds and Manchester saw a faster growth in prices, while Liverpool lagged behind. While prices dropped 6% between 2005 and 2015, the recovery has been strong over the last two years, and looks set to be equally strong in the future.
According to property website Rightmove, the overall average price of a property last year was £152,406. While they were similar to prices in 2015, they were up 9% on 2014’s average price of £140,367.
Most of the sales in 2016 were terraced properties, which have an average price of £104,314. Flats reached around £117,674 on average, and semi-detached houses sold at an average of £172,326. These prices are significantly below the national average property value in England of £243,220.
These figures also show that the slowest annual growth in house prices from July 2016 to July 2017 was in London (at 2.8%). It’s now the eighth month in a row that London’s house price growth has remained beneath the UK average.
Regeneration Projects Underway
Following the trend that once turned some of London’s poorest areas into up-and-coming property hotspots, Liverpool is undergoing long term, extensive regeneration.
This will only improve its appeal as a city to move to for renters and buyers. Increasing the attraction of the city to young people looking for urban living will attract those who can’t afford London, but are seeking a similar vibe.
With numerous multi-million pound developments in the city centre and in the docklands area of the city, Liverpool looks likely to become even more in demand. The area around the docks is likely to become the most sought-after part of the city, with carefully designed, high quality, relatively low cost living available.
Large Student Population
There are more than 60,000 students living in Liverpool, a number that is set to increase due to the draw of its higher education facilities. There is a high level of interest in both converting properties for use by students and for purpose built student accommodation.
The number of students presents opportunities for perceptive investors looking for long-term yields from a predictable and reliable demographic.
Liverpool is home to many renters, with more than 22% of the entire housing stock in the city owned by private landlords. While rental yields obviously vary depending on the specific area and property type and size, they are competitive across the region.
As times change and the tide turns away from London, Liverpool could be looking at a property boom during the next couple of years. The economic impact of the UK leaving the EU in March 2019 is yet to be seen, but there are clearly many reasons to consider building up a property portfolio in Liverpool as a safe investment.