There are many reasons why now is the right time for property investment in Liverpool. Liverpool has a population of 912,000, which saw an increase of 6000 people from 2021, meaning an ever growing rental market. The City attracts 54 million tourists annually and has a student population of over 70,000, as well as having it’s own international airport and seaports, so there is a strong short let and student market also. All these factors make now an exciting time for the Liverpool property market; here’s 5 reasons why you should invest.
1. Biggest Rate of Capital Appreciation in the Country
Liverpool saw the greatest increase in property prices of any other city in the UK. The Zoopla House Price Index, cites Liverpool as having an average capital appreciation increase of 10.3%, the biggest in the country, this is well above the UK average of 8.1%. This is the most conservative value for Liverpool’s capital appreciation.
There are figures which suggest an even greater rate of capital appreciation. The Land Registry Data for Liverpool (2021-2022) gives an 11% increase in property prices for the same period. However this massive increase has not affected affordability; as can be seen from the table below.
According to the JLL Residential forecast Report 2021 This upward trend is set to continue with property prices predicted to increase by 5% and an average increase of 4% per annum from 2021 to 2026. As you can see Liverpool performs strongly along with other areas in the north.
2. Strong Rental Market
The next reason to to pursue property investment in Liverpool is the strong rental market that has proved resilient to the worst effects of covid. The data from the Office of National Statistics suggests that the average rental increase for England has been 3.2% between 2021 to 2022. The Zoopla House Price Index has this figure for Liverpool at 6%, meaning that Liverpool can boast average capital appreciation nearly double the national average.
Things are also looking up for the future with the JLL Residential forecast Report 2021 predicting an increase of 3% between 2022-2023, and an average rise of 2.6% for every subsequent year up to 2026.
Rental demand is also looking like it will remain strong with an estimated 35,000 homes needed over the next 15 years.
3. Regeneration – Boosting The Local Economy and Rental Market
Over the past few years and at the moment there has been much regeneration and extensive modernisation which is important for property investment in Liverpool. These sites of regeneration include:
Baltic Triangle – A previously industrial area, the Baltic Triangle has become a serious centre for tech firms . Over 400 businesses in the tech industry are now based here. This brings all the social infrastructure you would expect; pubs clubs etc. The Baltic Triangle contributes £900 million to the local economy.
Liverpool One – A leisure and retail centre which has been open since 2008 costing £920 million. It is a massive complex with bars, restaurants, cafes, cinemas, shops, apartments, hotels and park. This development has attracted over 28million visitors, all of which has boosted the local economy, it has also created over 5000 jobs.
Knowledge Quarter – This is an area which houses many universities and colleges in Liverpool such as John Moore’s University and the Liverpool School of Tropical Medicine. Moreover, there are also amenities such as the Philharmonic Hall. This area has seen over £1.5 billion in investment and caters to the 60,000 students who study within its vicinity. It has created 14,000 jobs and contributes over £1 billion to the Liverpool’s economy annually.
Albert Dock – Albert Dock has become one of the most visited areas of Liverpool. It is now home to a wide variety of pubs, restaurants and tourist attractions including Tate Liverpool.
We Currently have a development which is close to both the Baltic Triangle and Albert Dock.
4. Local Economy and Employment
The strength of the local economy and rates of employment are important for property investment. They are a good indication of firstly, which way the property market is going to move and secondly whether people can afford to rent in the city.
According to Avison-Young 2022 City Forecast Liverpool’s economy is forecast to grow by almost 6% this year (2022) which is an almost tenfold increase from the pre-pandemic growth which was only 0.6%.
Unemployment figures are also looking promising with a fall of 1.3% between 2021 and 2022.
This is driven by the rebound in the accommodation and food sector – forecasted to grow by 28.9%. Arts and entertainment and education – forecasted to grow by 15.9% and 9.5% respectively. This parallels nicely with the city’s strengths of tourism, the universities and of course its football teams.
In conclusion, the data suggests that the property market growth in Liverpool is on course to continue meaning there is all the more reason to think that now is a good time for property investment in Liverpool.
5. Strong Short term Let and Student Markets
Liverpool also has a strong short term rental market with their being plenty of reasons to visit Liverpool. Liverpool is home to many sporting clubs. It has the most museums in the country outside of London and world renowned architecture. It also has Beatle related tourism as well as many other events hosted in the city. There are almost 60 million national and international visitors to Liverpool annually. Also there are no restrictions on how long landlords can let apartments for short lets. For instance, London restricts landlords to 90 days of short term lets. The returns for short term let models are much higher than for normal AST’s. Air BnB suggests that the average nightly rate in Liverpool is £145 a night, which would produce an a gross income of £42,340 at 80% occupancy, which after costs, would still leave a fairly hefty return.
There is also the student market to consider with Liverpool being home to over 70,000 students all of whom need somewhere to stay. Liverpool was voted the second best university town in the country and it’s universities continually see increase in uptake annually.
In conclusion, it is hard discount short term lets and the student property market when looking at investing in property in Liverpool. As they are markets that will only continue to grow stronger.
https://advantage.zpg.co.uk/wp-content/uploads/2022/03/UK-House-Price-February-1.pdf – Zoopla House Price Index
https://landregistry.data.gov.uk/app/ukhpi/browse?from=2021-06-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fliverpool&to=2022-06-01&lang=en House price index land registry for Liverpool
https://www.jll.co.uk/content/dam/jll-com/documents/pdf/research/emea/uk/residential-forecasts-report-2021.pdf – JLL Residential Forecast Report 2021
https://www.ons.gov.uk/peoplepopulationandcommunity/housing/bulletins/privaterentalmarketsummarystatisticsinengland/april2021tomarch2022 – National Rental Data
https://avison-young.preview.foleon.com/marketing-uk/2022-uk-cities/liverpool/ – Information about Liverpool’s local economy
https://www.topuniversities.com/blog/7-reasons-why-liverpool-uks-best-student-city#:~:text=With%20a%20student%20population%20of,student%20cities%20in%20the%20UK. – About student life in Liverpool