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Property hotspot: Liverpool

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In the first of a new series profiling the cities that may be great investments for landlords, we focus on Liverpool.

With a vibrant culture, large student population and major regeneration, Liverpool is definitely on the up.

Reinvention and regeneration

During the 19th and early 20th century, Liverpool was a key port for the movement of goods and people worldwide. But containerisation and other innovations saw the number of jobs decrease sharply. The city’s population almost halved, to just over £400,000, between 1931 and 2001.

However, in the past 20 or so years, there has been considerable investment in the area, by the EU and others. The city centre is undergoing a £14bn overhaul. The Liverpool Local Plan aims to create 38,000 jobs and 35,000 homes by 2033, and increase the population to more than 500,000.

The £5bn Liverpool Waters redevelopment is transforming neglected docks into 2m square feet of homes, offices and hotels, with a new cruise liner terminal also set to boost tourism to the city.

Along with the likes of Manchester and Leeds, Liverpool is part of the government’s Northern Powerhouse initiative, which is designed to make the region a much bigger player in the economy. Liverpool’s inclusion in this initiative is likely to drive further investment to the city.

“We have had some hard periods in this city, but I think people realise it’s time for a change,” says Robbie Spear, business development manager at insurance and vehicle accident management company Novo, an early occupant at Liverpool Waters.

Booming business

Thanks to its maritime heritage, Liverpool has a strong insurance sector, with firms including NMU and Coeus. It’s also home to numerous legal firms, such as Taylor Wessing, and other professional services companies.

Meanwhile, HMRC is moving some 3,000 jobs to the city centre, Unilever has opened its Advanced Manufacturing Centre across the estuary in Port Sunlight, and Sony’s computer entertainment arm is set to expand into a 50,000 square foot building in the city centre.

Other significant employers include business group Bibby Line and retailer Home Bargains, while the Baltic Triangle – a former industrial area in the city centre – is the vibrant centre of ‘independent Liverpool’, and forms a hub for creative and digital SMEs.

The £1bn Paddington Village project to the east of the city centre will house a bioscience complex that will include a new Royal Liverpool Hospital. Proton Partners, which treats cancer patients with-proton beam therapy, is also opening a £35m base there, with a new Rutherford Diagnostics facility nearby.

“We’ll only be yards away from the new HQ of the Royal College of Physicians, and will help cement Liverpool’s position as a world-leading hub of healthcare innovation,” says Ron Russell, head of operations at Rutherford Diagnostics.

Art, theatre and open space

“Liverpool punches well above its weight, culturally,” says Matthew Aston, director of MgMaStudio, an architects’ practice. “We’ve got a philharmonic orchestra, and the Everyman Theatre does great work and won the RIBA Stirling prize for the UK’s best new building.”

Tate Liverpool is perhaps the leading art gallery in the north, and the historic docklands is a UNESCO World Heritage Site, featuring the impressive Cunard and Royal Liver buildings. An impressive feat of regeneration, the former dockside warehouses are now a bustling centre rich with shops, restaurants and nightlife.

“Liverpool has a great retail area, lovely bars and a global street food eateries at the Baltic Market,” says Sara Kearns-Reed, who has 80 properties in the city. Not to mention that a meal in a mid-range restaurant is roughly £10 cheaper than in London.

“This is a pretty place,” adds Michael Spitzer, professor of music at the University of Liverpool, who moved to the city 10 years ago. Indeed, Liverpool boasts a number of picturesque green spaces and large parks and is a 15-minute train ride to the beach at Crosby.

A place of learning

There are an estimated 70,000 students spread across Liverpool’s three universities.

More than a quarter are from overseas and they’re often wealthy, says Arran Kerkvliet, investment director at One Touch Property Investment, and many want quality city-centre apartments as well as the usual houses in multiple occupation (HMOs). This demand may increase in light of John Moores University’s plans to build a new three-and-a-half-acre central campus, which was got the green light from the council last year.

Unexpectedly accessible

“We have a fleet of vehicles that need to be moved all over the UK,” says Novo’s Robbie Spear. “But Liverpool is very central. We can be in Scotland or the South East in around three hours.”

The city is served by the M62 and is around 30 minutes by train from Manchester, which will benefit from increased access via HS2. Some £250m is being spent improving the roads in Liverpool.

Prime areas

Six of Liverpool’s postcodes are in the top 25 buy-to-let yields in the country, according to Totally Money’s Buy-To-Let Rental Yield Map 2018/19. They are:

L1 and L2: the city centre

This area typically features many new apartments and is popular with young professionals.

L1

Average rent: £923

Average property asking price: £118,754

Average yield: 9.33%

L2

Average rent: £854

Average asking price: £150,663

Average yield: 6.80%

L3: the waterfront

Includes the Royal Albert Dock, home to the Tate. It features mainly apartment and warehouse developments.

Average rent: £836

Average asking price: £134,803

Average yield: 7.44%

L5: Kirkdale and Everton

This area features traditional Victorian terraced houses and newer developments, with improving public spaces.

Average rent: £668

Average asking price: £104,893

Average yield: 7.64%

L6: Anfield and Fairfield

These areas are also known for their traditional terraced houses. The city council policy of all landlords being licenced and subject to property inspections is boosting housing standards in these areas.

Average rent: £765

Average asking price: £116,995

Average yield: 7.85%

L7: Kensington and Edge Hill

Popular with students due to its proximity to the universities.

Average rent: £941

Average asking price: £115,398

Average yield: 9.79%

Other areas worth considering include family areas such as Aigburth and Walton, and L8. “It’s close to the city centre and borders L17 [the upmarket Sefton Park]. I don’t understand why it hasn’t come up yet, but it will,” says Helen Griffin-Booth, director of lettings firm Bluerow Homes. The council has cracked down on HMOs in student-heavy Wavertree, L15, to increase the number of families in the area. “Investors are jumping ship, so there is the opportunity to snap up bargains here,” adds Griffin-Booth.

Liverpool house prices are expected to rise by 5% this year, against a 2% national average, according to property analyst Hometrack. Arran Kerkvliet of One Touch Property Investment thinks yields will increase by 5% – 7% within two years.

Updated: 01 May 2019