9 Reasons to Invest in Property in Liverpool and Where to Buy
Liverpool is an exciting Northern city with a long, proud history and plenty of assets that will enable it to meet its ambitions for the future. Liverpool is catching the eye of property investors, particularly in 2020, which saw increased interest due to relatively low house prices and high rental demand.
A city on many “one to watch” property investment lists, we’d argue that now is a great time to consider investing in property in Liverpool. With a growing population and investment contributing to its growth as well as the title of a top-three city in the UK to start a business, there’s plenty of reasons investors should be looking to Merseyside.
Read on to find out our top reasons to invest in property in Liverpool, and where to buy.
1. Invest in Property in Liverpool: A Strong Northern Economy
One of the Northern Powerhouse Cities, Liverpool is a big contributor to the UK economy and sits at the centre of the broader Merseyside Economic Area with a GVA close to £14 Billion.
As the fifth-largest metropolitan area in the UK, Liverpool has a population of around half a million making it the country’s sixth most populous city. The wider catchment area puts 2.5 million people within reach, of which 1.4 million are working age.
With continual regeneration projects transforming the city centre, Liverpool’s population continues to increase at a steady pace, creating demand for housing and rental accommodation. With a growing economy, infrastructure and investment transforming the city, Liverpool makes an attractive case for investors looking to purchase property in the North of England.
2. A Diverse Business Hub with High-Value Industries
In 2020, Liverpool was named the 3rd best UK location to start a business and is home to business and industry from a wide range of high-value sectors.
A historic maritime centre, one of the city’s greatest assets is its ports and logistics infrastructure, including a new deep-water containment terminal. This infrastructure enhances the supply chain transit for businesses and world-leading manufacturers, pharmaceuticals, life sciences and medical manufacturers, including Jaguar Land Rover Unilever, AstraZeneca, Nestlé Health Sciences, and Orsted, all have significant operations in the city.
With several excellent universities, Liverpool supplies businesses with a steady pipeline of skills, and as the city develops, it continues to be an attractive place to work. The Liverpool City Region is one of the UK’s leading financial centres, with the likes of Santander, Barclaycard and RSA having a base. It is also the largest wealth management centre outside of London, and home to over 650 major law firms.
3. Liverpool has an Up-and-Coming Startup Scene
Host city for the International Festival for Business, with events like Fintech North and the Binary Tech Conference, Liverpool is becoming ever-popular as a startup destination in the North-West.
A number of financial backers continue to support the startup ecosystem. Santander bank has a startup incubator and Liverpool’s MSIF Fund delivered £158 million to support local businesses to date. Tech Nation gave the city 79% rating for Tech Sector Growth Potential, predicting it as a hub for tech growth.
Already an established base for fintech companies, edtech is another area which is gaining ground in the city as well as companies specialising in cutting-edge technologies like VR and AR-gaming.
Liverpool is also the most filmed UK city outside London and companies such as Hurricane Films, Lime Pictures and LA Productions call the city home. A new studio due for completion is soon to further boost the city’s creative, TV and film credentials. Diverse, high net-worth industries mean an influx of workers and young professionals that are a key rental demographic.
4. Liverpool’s Lower-Than-UK-Average House Prices are Attracting Buyers
Comparatively low property prices and high rental demand make Liverpool an excellent choice for buy-to-let property investors.
In the second half of 2020, interest in purchasing property in Liverpool skyrocketed. Certain areas experienced a “mini-boom” driving up house prices in three postcodes in particular – Kensington, Toxteth and Bootle, all popular for student lettings. The increase is likely due to a steadily increasing flow of demand, and supply slightly behind demand which edges prices up.
Overall in 2020, the Liverpool property market saw a 32% year-on-year increase in buyer interest and offers accepted increased 77% compared to the previous year. According to landlords, Liverpool was named the third-best UK town to invest in a buy-to-let property, following Manchester and London.
While interest in property increased, house prices remain affordable with a one-bedroom property averaging £94,000, making Liverpool an attractive place to make a property investment. Predictions estimate that the North West region in general will see house prices rise by 24% through to 2024, outpacing the rest of the UK.
5. Liverpool Offers High Rental Yields
In October 2019, Liverpool was named the best location in the UK for buy-to-let yields, with six of its postcodes, in particular, boosting its appeal (L7 with 10.3% yields. L6 with 8.4% yields. L1 with 8.1%. L15 and L4 both with 7.4% yields). Average yields sit at around 5.0%, one of the highest in the country and an attractive rate compared to London’s 3.0%.
Postcodes in the North-West are becoming increasingly popular as investors look to diversify their portfolio and get ahead of investment trends. A city with a high young population, there’s a robust rental market that investors can capitalise on, making Liverpool a highly desirable location for an investment property.
6. Liverpool Offers Residents an Appealing Lifestyle
With plenty of galleries, museums, an iconic waterfront, legendary nightlife, Premier League football at Liverpool and Everton and a UNESCO World Heritage Site, Liverpool offers plenty to see and do.
A 24-hour city, vibrant and creative Liverpool is one of Europe’s best places to visit. The city’s residents are known for being friendly and down-to-earth, and the city boasts plenty of greenery with Sefton Park, Palm House in the centre, and Calderstones Park which even boasts a Japanese Garden and mini railway.
7. Liverpool has a Thriving Student Rental Market
While the buy-to-let market is strong, student property is the fastest growing sector of the market in Liverpool.
Liverpool’s world-renowned universities, The University of Liverpool, Liverpool John Moores University, Liverpool Hope University and Edge Hill University produce a pipeline of more than 30,000 graduates every year. Investors can expect good returns thanks to a growing number of student tenants looking for quality accommodation in the city.
With around 15,000 student beds, there is strong demand for rental property, presenting investors with an ideal rental market for their properties. Demand is only set to increase as a rising number of students choose to study in the city and there remains a shortfall in accommodation. Shared student accommodation presents excellent yields for investors, and there is demand in areas such as Kensington and Toxteth in particular.
8. Investment Continues to Transform the City
In the last couple of decades, Liverpool has undergone rapid transformation and regeneration. Princes Dock is being transformed by a £5 billion investment as part of the Liverpool Water scheme. A £400 million Deep Water Terminal will allow the port to take 95% of the world’s largest ships, and there is over £1 Billion investment in port and infrastructure overall to help Liverpool capitalise on its proximity to four of the world’s top six shipping lanes.
Over the next decade, Liverpool will deliver some of the UK’s more ambitious infrastructure schemes – Liverpool2 deep water port terminal (phase 2), Liverpool Waters and Wirral Waters mixed use development – an investment of £9 billion – New Royal Liverpool University Hospital and Health Campus, and the transformation of North Liverpool, Ten Streets. Each of these investments brings jobs and boosts the city’s livability presenting massive opportunities for property investors.
On top of a £900 million devolution deal, the Liverpool City Region Combined Authority has secured more than half a billion pounds in additional funding from the government, including £173 million in Transforming Cities Funding to improve transportation within the city region and a share of £300 million to connect Liverpool to the HS2 network, further connecting Liverpool to the North and beyond.
9. Liverpool is a Well-Connected city in the Heart of the North
Liverpool is well connected with 10 motorways, 10 rail-linked terminals, as well as two major airports serving the area, one of which, Manchester Airport, is just 30 minutes from the city centre. The city is a two-hour train journey from London Euston and is in close proximity to Liverpool John Lennon Airport which flies internationally.
Which Areas of Liverpool are Best for Property Investors?
Liverpool can be divided into four key zones; the traditional core, the commercial district, the waterfront and the creative quarter. The City Centre has benefitted from a range of investment and regeneration in recent years, making it a vibrant and attractive place to live. Property investors have increasing confidence in the area, particularly with the new £5.5 billion Liverpool Waters development.
The L1 postcode delivers attractive average yields of 10% and the average price for a property in Liverpool City Centre is £119,000.
The Kensington area was one of the postcodes seeing a jump in house prices in 2020. With recent investment in the hospital, further development has helped to bolster the appeal of the area, which is located on the fringe of the city centre.
In the last year, average price for a property in Kensington was £114,822.
Toxteth is an inner-city area of Liverpool located to the south of Liverpool City Centre. While there is much terraced housing, many large Victorian properties are being broken up into separate dwellings creating a growing number of flats.
One the cheaper areas of Liverpool for property, there is much regeneration taking place, and the area is popular with students and is coined an “up-and-coming” part of the city.
Average property prices in Toxteth over the past year were £114,000.
Located North of the City Centre, the L20 area of Bootle offers mid-priced property and plenty of HMO properties (house in Multiple Occupation). Adjoining the City of Liverpool and home to many docks, it is well serviced by bus and rail routes.
Liverpool is a city on its ascendancy and with new infrastructure investments and a strong business ecosystem, there are plenty of reasons to consider purchasing a property in the city. Comparatively low property prices and high rental demand and yields make Liverpool an excellent choice for buy-to-let property investors. Find out more about the options in Liverpool by getting in touch with us today.