The investment property market in Liverpool has received a lot of attention over recent years
In 2021 the city is, once again, catching the eye of investors with house price growth almost five times higher than in London. The city also continues to boast some of the best rental yield postcodes in the country.
With Sterling Woodrow, discover the wealth of property investment opportunities in Liverpool as well as learning about the best areas in the city to invest in, and how you can expand your portfolio to include a lucrative investment in this thriving local economy.
The Property Market in Liverpool
Liverpool’s property market is unquestionably thriving. A student population of over 60,000 and a multi-million-pound regeneration project means that demand for accommodation across the city is higher than ever before.
For investors like you, this means that there’s plenty of opportunity to cut yourselves a piece of the property pie. With young students, young professionals and even retirees looking to call Liverpool home, rental yields are among the highest in the UK! On average, Student properties offer Minimum Assured Net Yields of 9% for 3 years. With a recent £600 million investment in the University of Liverpool, this is only set to catapult demand for student property even further.
Don’t be fooled into thinking that Liverpool is just another student property investment hub though.
Private sector jobs have increased by 13,500 (8.1%) in Liverpool (2009 to 2014) with resident earnings being significantly higher than Core Cities (38%) and Great Britain (36%) averages. This represents another lucrative opportunity for investors looking for long-term investment opportunities. It is no surprise that Liverpool has been named as one of the best property investment locations in the UK in 2021.
Yearly population growth in Liverpool ensures the longevity of residential property demand beyond the present. A vibrant tourist economy also means there is a steady flow of visitors to this hidden gem of a city.
Let’s take a look at some of the main driving forces behind Liverpool’s attractive and growing property market.
Fast-Growing Property Prices
Alongside the whole of the North West region, Liverpool is known for having some of the fastest-growing house prices in the UK. Land Registry data shows that property prices in Liverpool have seen growth of 36.11% between January 2010 and January 2021. More recently, the last three years have seen property prices in the city increase by 21.8%, indicating that growth is showing no signs of slowing down any time soon.
High Levels Of Foreign Investment
Liverpool receives one of the highest levels of foreign direct investment in the UK. Between 2017 and 2018 alone there was a 160% increase in Chinese buyer enquiries into buy to let investments in the city. Popular areas in Liverpool for overseas investment are Knowsley, St Helens, and Haydock. It is estimated that FDI across Merseyside has led to the creation of nearly 4000 additional jobs.
Liverpool’s Fast Economic Growth
The ONS revealed that Merseyside boasted economic growth of 3.1% in 2016 – higher than any other major city region in the country. With the latest regeneration plans, along with continued domestic and overseas investment, Liverpool’s economy looks set to continue this fast growth over the coming years.
Standing at 906,000 as of 2021, the metropolitan area of Liverpool grew 0.44% since 2020. The city population has also seen considerable growth in recent years, expanding by 1.4% since 2017. Unlike many areas of the UK that are seeing an ever-ageing population, around 75% of Liverpool’s city centre residents are aged between 17 and 29, creating a huge level of rental demand. With the predictions that more and more young people will continue to leave London and move to the more affordable North, it is expected that Liverpool’s population is set to continue to grow rapidly in the coming years.
A Rich Cultural Heritage
It can’t be denied that the city of Liverpool is blessed with culture, and it was the worthy recipient of the European Capital of Culture in 2008. Known across the world as the birthplace of the Beatles, Liverpool has a prominent music scene that encompasses LIMF, Liverpool Sound City, Africa Oye, and BBC Radio 6 Music Festival. In addition to music, Liverpool is a famous sporting city, with the iconic Liverpool and Everton football clubs bringing in herds of tourists each year.
High Tourism Levels
Speaking of tourists, Liverpool is one of the UK’s major tourist hotspots and is popular with overseas travellers as well as domestic tourists looking to spend time in the city. There is certainly no shortage of entertainment in Liverpool, with world-class shopping and a whole host of restaurants opening on a regular basis, as well as a popular nightlife scene. It isn’t just the entertainment factor that draws tourists to the city, with beautiful architecture around every corner, the city centre is an open museum in its own right. Cultural attractions include the Tate Liverpool and the Liverpool Walker Art Gallery, both showcasing many exciting exhibitions.
Why Invest In Liverpool Property?
Liverpool benefits from several streams of high-yielding investment markets, including the student property sector. With over 70,000 students across 4 Universities, its economy has much to be thankful for. This includes a £950 million regeneration project completed in 2008 and the Beatles legacy alone is worth around £82 million to the Scouse economy.
Originally famous for importing goods such as fine wine from all corners of the globe, Liverpool was also famous for its strikes during the Maggie Thatcher reign of power. But rest assured it has left behind its troubles of an era that brought about years of hardship and is now on a projectile course to become the powerhouse it once was for the British economy.
Keep reading to learn more about the benefits of investing in Liverpool’s property market and why you should explore investment opportunities in the city.
High Rental Returns
Liverpool possesses a range of investment property opportunities offering some of the highest rental yields in the UK. As rental yields are one of the fundamental factors in property investment, it’s easy to see why the city is seen as a property investment hotspot. Whilst average rental yields across the city stand at an impressive 5%, some of the more lucrative postcodes such as L1 can offer as much as up to 10%.
Affordable Property Prices
In addition to high rental yields, another factor that makes Liverpool so popular with investors is the affordability of its property prices. Whilst on the increase, Liverpool’s property prices remain a lot lower than that of other UK cities. As of April 2021, the average property price in Liverpool is £182,689 compared to £917,073 in London, according to Zoopla. Lower property prices allow investors to build their investment portfolios much faster than they would be able to in other cities.
Ongoing Rental Demand
With such a large proportion of students and young professionals making up Liverpool’s population, it is no surprise that the area benefits from high demand for quality rental property. Liverpool property investment is, therefore, an attractive opportunity for those looking to appeal to a range of tenants. The student population of over 70,000 alone guarantees a reliable stream of demand for property year-round. The city’s buzzing business scene and nightlife also make Liverpool extremely popular with young professionals.
Strong Capital Appreciation Prospects
As an investor looking to make a return on your investment, you will want to ensure there are strong capital appreciation prospects when buying a property. Due to surges in demand, property prices in Liverpool have seen a huge increase in recent years. With Liverpool now seen as one of the best cities to live and work in the UK, this positive trend is expected to continue for many years to come.
When it comes to investment, we know that serious investors are interested in the forecasts, figures and finding the best property investment opportunities in Liverpool. For many, it’s not a question of “should I invest?” but “how do I invest?” We aim to help you with this decision, so if you have any questions, please do get in touch and our senior portfolio managers will be happy to help.
The Best Areas to Buy an Investment Property in Liverpool
Location can quite often be the main factor in whether an investment is successful or not, and as an investor, it can be hard to know where to start when exploring a new city. To simplify things, we have selected some of the best areas to buy an investment property in Liverpool.
The best areas for rental yields in Liverpool
The postcodes in Liverpool with the highest average rental yields are L1, L11, L2, L3, L6, and L4. The success of these postcodes can be attributed to a combination of high rental yields, growing demand, and high capital appreciation potential.
Rental yields are highest in L1, reaching as high as 10%, with L11 seeing yields of 8.67%. L6 and L2 follow close behind with yields of 8.12% and 7.56% respectively. L3 generates yields of 7.4% and L4 boasts rental yields of 7.13%.
The majority of these postcodes fall within the booming city centre, meaning there are some great opportunities for property investment in these high-yielding locations.
Liverpool City Centre
Average Property Price: £148,768 (April 2021)
The city centre is undoubtedly one of the best property investment areas in Liverpool due to the mix of high rental yields, large demand for rental property, capital appreciation, and regeneration projects. The ideal location for both students and young professionals, the city centre is popular for those looking to be close to the hustle and bustle of city life. Regeneration zones such as the Ropewalks and the Baltic Triangle are only going to add to Liverpool city centre’s desirability in the coming years.
Toxteth and Dingle
Average Property Price: £169,432 (April 2021)
Both Toxteth and Dingle are up and coming for their investment potential. These areas in the South Liverpool area attract high demand from young professionals and students looking for something more affordable but still close to the city centre.
Average Property Price: £290,765 (April 2021)
Primarily a residential area, Crosby is one of the best areas for property investment in Liverpool due to its high average rental yields of 7% and potential for capital appreciation. Despite overall property prices being higher than other Liverpool postcodes, the potential returns in this area are not to be missed.
Average Property Price: £127,735 (April 2021)
Birkenhead is another up and coming investment hotspot in Liverpool. Properties are extremely affordable in this area, and with regeneration expected in the near future, Birkenhead should be on the radar of any savvy investor looking for high capital appreciation rates. The area is also within close proximity to the city centre, adding to its desirability as an investment location in Liverpool.
Student Property Investment in Liverpool
Student property investment is one of the most popular choices for those looking to invest in the UK property market, and with its huge student population, Liverpool is a prime location.
The city’s two largest Universities are set within walking distance of all the major developments In Brownlow Hill. It’s one of the only cities to cater to students of all walks of life too. In addition to The University of Liverpool the city boasts a further 2 universities, totalling 4 institutes of higher education. This equates to over 70,000 students, most of which requiring accommodation for a minimum of 3 years each.
Student properties stretch from L1 all the way down to Penny Lane in the south. The largest residential campuses owned by the University of Liverpool are situated outside the regeneration zone and require bus trips into town, specifically for first year students only. This has paved the way for private investors to accommodate other students over their educational period. A short walk through this area towards the end of the academic year reveals the true demand, as young students are dashing around property to property trying to find somewhere to live ready for September. With such potential, you would expect private landlords to be in fierce competition. But the truth is there is still an imbalance of private landlords to accommodate the vast number of students.
Existing student properties are a mix of old terraced housing and purpose-built apartments. But with limited land in areas closest to the University, more and more students are moving to apartments for ease of their studies and peace of mind that their accommodation will add extra stress.
Liverpool’s Investment Economy
Liverpool has a strong economy with an estimated worth of around £121 billion.
With over 68,401 separate businesses spread across Merseyside in a wide variety of industries, the Liverpool area is no stranger to diversity. It relies not on one sector alone, but is intelligently supported by all businesses and investment sectors. This gives Liverpool a security it never had in the 1980s, when the collapse of one industry meant the city’s economic reputation simply crumbled.
The area round L1, L2 spans around 10 square miles and is peppered with new build developments. A large focus is on post-graduate and international student living, all who are willing to pay above the average price for more luxurious living for sake of ease and its affordability compared to the rest of the UK. The dock areas have seen several large developments including the Arena and adjacent apartment buildings, all providing Liverpool with a luxurious lifestyle choice for occupants. The Liverpool Museums are also a recent addition to this area, with its own Tate modern, a Beatles museum, and the more popular Liverpool Museum.
Competition on new builds in Liverpool are fierce as each one strives to offer better living than the next. The young and trendy population know apartments to be more desirable than homes, given their convenience & luxury. Apartment prices outstrip terrace properties which require high maintenance and much renovation before deemed fit to live in. Much of the Victorian terrace streets are facing demolition as flats are in extreme demand.
Liverpool Property Investment Growth
Liverpool was crowned UK capital for fast-growth firms. It has the highest proportion of new businesses succeeding and having more new successful businesses than London. Fast-growing firms rose by 56% between 2009 and 2015 in Liverpool. Merseyside now has the highest proportion of these companies in the entire UK, greater than even the most popular new business areas in London such as Old Street.
Liverpool is a key player for the Northern Powerhouse. As one of the fastest-growing and largest Northern cities, it has seen promising increases in all sectors. This bodes well for investors already with property in the area. High rental yields, growing population, and a bright economic outlook mean now is certainly the best time for anyone looking for property investment in Liverpool.
Investing in Property in Liverpool with Sterling Woodrow
Whether you are a first-time investor looking to understand your options and make the first steps towards building your portfolio, or an experienced investor looking for someone to effectively manage your investment, our team goes the extra mile to deliver exceptional service and results.
Liverpool Property Investment FAQs
This will entirely depend on the kind of investment you are looking to make. For buy-to-let, areas such as The Ropewalks and L1 are lucrative opportunities as affluent students & professionals look to these locations for luxury apartments.