Liverpool Property Market Report for Investors

Liverpool has been on the rise for a while but is it showing any signs of slowing down?

The former European Capital of Culture has become a favourite place for students, tourists and professionals alike, and its popularity has resulted in no small amount of interest from investors.

Still, with so much attention, is Liverpool’s value for money beginning to dry up? To answer that question, here’s our 2019 Liverpool Property Market Report.

Key Facts about Liverpool

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Liverpool’s cultural credentials are beyond repute. The city is home to artistic hubs such as the Tate Liverpool and the Biennial arts festival, it’s given us some of the world’s most influential musicians, and it even has two Premier League football teams to boot.

All that makes Liverpool a great location for a day out, but is it a good location for your next investment? Here are some key facts to help you decide.

Economy

  1. Liverpool’s City Region economy is worth £29.5billion, or 1.8% of the UK economy.
  2. Liverpool is home to over 252,000 businesses.
  3. Liverpool is the leading Northern Powerhouse region for GVA (gross added value) growth.

Students

  1. The city is home to around 50,000 students from three universities.
  2. The University of Liverpool contributes over £650 million GVA alone.
  3. Liverpool’s city centre student population grew by 208% between 2001 and 2011.

Tourism

  1. The economic value of the visitor economy rose from £2.73 billion to £4.53 billion between 2009 and 2017.
  2. In 2017 Merseyside welcomed 64.2 million visitors to the region.
  3. The tourism industry in Liverpool now supports over 53,500 jobs.

Liverpool’s Long-term Appeal to Investors

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Liverpool’s rapid growth and investment from the Northern Powerhouse makes the city an attractive prospect, but before you start buying property, you need to confirm Liverpool’s fortunes aren’t about to fall.

Luckily, all the signs point to the city continuing to grow, with demand for property still outrunning supply. This continues a trend we’ve seen since the early 2000s. Since the 1930s Liverpool’s population had been gradually falling, but at the turn of the century that all changed.

Between 2001 and 2011, the population grew by 5.5% from 435,500 to 466,400. As demand grew so did house prices. In the last five years, according to Zoopla, property prices have risen by 22.93%.

And this doesn’t look set to slow down any time soon. In fact, recent statistics have house prices rising by 5.8% in the last 12 months, compared to the UK average of 3.2%.

Finally, if that wasn’t enough, there’s still plenty of room for growth in Liverpool property. The city is four times cheaper than London, with the average home selling for just £118,000, compared to capital’s £491,200.

Young Professionals

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As house prices continue to rise, more and more young professionals are having to leave it later to take their first step onto the property ladder. In fact, 44% of private tenants are not expecting to buy in the long term.

While young people may be prepared to wait for their own home, very few want to wait in poor living conditions. As a result, many young professionals actively seek out luxury accommodation.

After all, if you’d spent three years in student accommodation, wouldn’t you want a taste of the high life afterwards?

This creates a strong market for investors to tap into, so long as you can find a location with a steady stream of young professionals entering the job market.

As previously touched on, Liverpool has a strong student population of over 50,000 and a good retention rate, meaning many choose to stay and work in the city after uni.

And this isn’t guesswork, it’s plain to see in the data. Between 2001 and 2011, the number of residents aged from 22 to 29 more than quadrupled in Liverpool City Centre. This shows a clear demand for property in the city driven by young professionals.

Ongoing Investment

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Clearly, Liverpool’s growth has not just happened by accident. A lot of time and money has gone into – and continues to go into – making the city a powerhouse of the north.

New homes, jobs and infrastructure are being created as part of a host of investments to regenerate the city. These include the Liverpool Waters scheme and Regenerating Liverpool, along with Liverpool Local plan, which aims to deliver 38,000 new jobs and 35,000 new homes by 2033.

All in all, investments in Liverpool are currently adding up to around £14 billion worth of spending.

However, it is not just public investment that is transforming the city. For all the reasons already touched on in this article, private investors from across the world are also looking for ways to benefit from Liverpool’s success.

Strong Rental Yields

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You can look at all the investment stats you want, but the ultimate proof is in the strength of the rental yields.

Like every city, Liverpool has strong and weak areas for rentals, but on the whole, multiple postcodes in Liverpool are outperforming the rest of the country.

For the 2018/19 year, Liverpool’s L7 postcode had the second highest rental yield at 9.79%, while the L1 postcode came in at fourth. All in all, Liverpool has six postcodes listed in the top 25 in the country.

This follows a similar trend from previous years and makes the city one of the most consistent areas of the UK to find high yielding properties to invest in.

Liverpool’s Next Steps

Liverpool’s investment is not nearing its end. The projects we discussed are ongoing and in 2017 the city elected its metro mayor, who has more power to shape Liverpool’s growth and economy.

Liverpool is a popular choice for university students and tourists, and the markers that made the city such a good investment location ten years ago still exist today.

It’s no wonder then that Liverpool has the fastest growing economy of any non-capital UK city. In 2017 Liverpool had a growth rate of 3.3%, far above the UK average of 2%.

For more information about investing in Liverpool, get in touch with our team.