Why Liverpool is Attracting Buy-to-Let Investors

Investors interested in buy-to-let property are increasingly heading north to the cities of Liverpool, York and Manchester.

Back in 2014, then Chancellor George Osborne announced plans for a ‘Northern powerhouse’. His plan was to combine the qualities and might of major cities in the north of England and their population of more than 15 million people to revitalise the economy.

While Osborne is no longer in the government, and much has changed politically, the idea of this northern powerhouse is taking on momentum.

Connectivity is Vital

In order to bring cities closer together, connectivity is essential. This works through the implementation of new transport plans, including HS1 2 and 3 (Northern Powerhouse Rail) and the longest road tunnel in the world cutting through the Pennines, to drastically cut journey times between key cities like Manchester and Sheffield.

Other plans to minimise the economic gap between the north and south of the country involve building up the technological, scientific and cultural sectors. Manchester is investing around £1 billion into its infrastructure, for example.

Reliance House Exterior in Liverpool Water Street

Buy-to-Let Investment

Many high-level buy-to-let investors are from the south of the country, attracted to the north by lower entry prices and relatively high yields. The fact that capital growth remains fairly modest isn’t enough to put people off.

In June 2017, Liverpool was crowned best city with the highest yields for buy-to-let investment, according to mortgage broker Private Finance. Sheffield also rates highly for city centre yields.

While in much of the north capital gain is modest, there is still the possibility for larger gains in specific areas. York is a good bet for buy-to-let from the perspective of capital growth. City centre apartments will always remain popular with professional singles and couples, and there’s also a wide scope for superior flat shares.

The University Effect

For many of the cities and towns popular with buy-to-let investors, the student affect is a key contributor. Student populations in cities like Liverpool and Manchester provide a reliable and continuous market for property investors.

Many new developments in Liverpool are for the private rented sector (PRS), and so can’t be sold as owner-occupier properties. These kinds of development really play up the benefits of superior rental accommodation, with lots of city centre developments offering prime locations, concierge service and gyms on site.

Why is Liverpool Such a ‘Good Buy’?

For the same reason as Manchester. Liverpool is a great place for buy-to-let investment due to its strong local economy and serious shortage of housing.

Liverpool also boasts a brand new superport, which is creating new job opportunities in shipping and logistics. The universities are feeding into the employment boom and the incessant demand for housing is pushing rents up. All great news for investors looking for a healthy return on investment (ROI).

Young professionals who want to live right in the centre of buzzing cities is a significant demographic in 2017. There’s huge demand for eye-catching apartments, centrally located near to the best nightlife, retail opportunities and restaurants.

When the economy crashed ten years ago many northern cities were left high and dry with too many new-build flats left empty. In 2017 there is a diverse mix of owner-occupiers, investors in developments, more build-to-let properties and major companies boosting jobs. All in all, the foundation is strong for investment in the northern cities, and Liverpool in particular should be on the list for any discerning property investor.