Liverpool holds firm in investors’ hearts – and wallets
Liverpool has been on the radar as a city for property investment for many years. So, what is the secret to the city’s lasting investment credentials? Having just chosen Liverpool as the location for its first non-London office, specialist end-to-end property investment company Surrenden Invest, was keen to share its knowledge of the local market.
Sales Director Joanne McCormack reveals all…
Where is the Liverpool property investment market at today?
Liverpool has a buoyant market right now when it comes to residential investment opportunities. Government figures show that the city built an average of 713 homes per year between April 2009 and March 2016. However, the Home Builders Federation has estimated that the city needs to build 3,000 homes annually to keep up with demand. This has led to demand far outstripping supply, particularly considering the trend over the past decade for people to move into the city centre.
One consequence of this is rising rents. Rents rose by 4.4% across the North West in 2016. Home values have also been rising, with an increase of 22.7% across Liverpool over the past five years. Apartment prices have risen even more – by 25.2% over the same period.
What makes Liverpool an investment-grade destination?
Liverpool has an incredible amount going for it. As well as a thriving property investment market, the Liverpool City Region economy is performing well. It is leading the Northern Powerhouse area in terms of GVA growth per capita, as well as overall GVA growth. The city has a largely service-based economy, which was worth £29.5 billion in 2015. Added to that is the fact that Liverpool enjoyed a 56% growth rate for its fast-growing businesses between 2009 and 2015 – the highest rate in the UK.
The city is also investing a great deal in its future, with £900 million available to the city’s metro mayor over next 30 years. The SuperPort Action Plan alone, which covers the period from 2011 to 2020, will add £18.3 billion of additional GVA by 2030.
There has been talk of Liverpool becoming oversupplied with property, from your experience on the ground, do you feel this is the case?
Definitely not – we wouldn’t have opened an office here if that was the case!
Liverpool’s population increased from 435,500 in 2001 to 466,400 in 2011. Over the same period, 22 to 29-year-olds in the city centre increased fourfold, while the overall city centre population increase stood at 160%. This new trend for living in the city centre has led to a huge increase in demand for rental properties. Developers are racing to keep up, rather than creating an oversupply.
Which parts of the city are seeing greatest investor interest at present and why?
Investors are keen to be involved in several areas of central Liverpool. The waterfront Albert Dock area remains popular, while the Ten Streets area is one of the latest locations to capture investors’ interest. Ten Streets is particularly exciting as it’s undergoing a 15-20-year strategic overhaul that is focusing on building a new ‘creativity district.’ This will bring lasting, long-term benefits to Liverpool and investors are keen to be a part of that.
What is the typical property that buy-to-let investors are looking for?
There are a number of general characteristics that buy to let investors in Liverpool are seeking. Off-plan homes remain popular, though there is also a market for completed properties. Location-wise, the city centre and key regeneration areas are top of the list. Investors are also looking for a good blend of reasonable entry point in terms of price, but high end in terms of design and finish – there’s definitely a ‘Liverpool look’ that is winning investors over.
Liverpool has traditionally seen many overseas investors buying property in the city, is this trend still occurring today?
Yes, Liverpool remains popular with overseas investors. The Liverpool LEP is second in England for its foreign direct investment strategy according to fDi Magazine. It also ranks joint second in the list of top ten mid-sized European cities of the future 2016/17 and fourth out of all mid-sized European cities for its business friendliness. Combined with the city’s bustling property market and growing population, these factors mean that Liverpool remains popular with overseas investors.
Where are these overseas investors from and where and what are they buying?
We’re seeing significant interest from overseas buyers into Liverpool from Hong Kong and China together with the Middle East. City Centre locations aside, typically for end users we are seeing the greatest interest from an investment standpoint around the Ten Streets regeneration area to the North and the Baltic Triangle area to the south of the City Centre
Tens of millions of pounds have been pumped into the regeneration of Liverpool. As a local resident, do you feel this has had an overall positive effect?
The money pouring into Liverpool has benefited residents. As well as infrastructure development projects, the city has benefited from enhanced cultural attractions and new business/leisure areas. These have not only created new jobs for residents, but also added to the city’s entertainment options.
How do you feel the Ten Streets regeneration project will benefit Liverpool?
The Ten Streets regeneration is a ambitious project covering 125 acres of former docklands. It’s going to benefit the city in several ways. The scheme is due to create around 2,500 job opportunities, which is obviously good news for residents. The aim to create a ‘creativity district’ will also give this part of the city its own distinctive character and create a legacy that will benefit future generations of Liverpool residents and workers through a diverse range of facilities. It’s a exciting project.
In terms of Liverpool’s economy, as part of the Northern Powerhouse, the city’s success is strategically important to the overall UK economy. Do you feel that the local economy has picked up?
As I mentioned earlier, the Liverpool City Region economy is at the forefront of the Northern Powerhouse area in terms of both GVA growth per capita and overall GVA growth. The economic pickup has been most clearly notable in terms of job growth.
Liverpool is reviving after years of decline with the city’s population growing as it gains a reputation as an economic magnet that can attract investors. Over the past decade some £5bn of investment has transformed the centre of Liverpool leading to excellent growth prospects as one of the UK’s best performing markets. The private sector is creating jobs at a faster rate than before the recession with big companies such as Deutsche Bank, Jaguar Land Rover & Unilever all moving large parts of their operation into the area
Do you feel that there are enough new jobs being created in the city?
In the five years to 2015, Liverpool reported the largest job growth in the UK, at 55% (alongside Manchester). Meanwhile, job vacancies in the city surged by 34.8% in Q1 2016, which meant that Liverpool had the strongest year-on-year job growth in the country. With schemes like the Ten Street regeneration and the SuperPort Action Plan adding thousands more jobs, there are plenty of new jobs being created here!
There has been much talk of late of people, especially young professionals, moving out from London to other parts of the UK. Why do you feel Liverpool is an attractive destination for migrants from London?
Liverpool offers a vast array of cultural attractions and leisure pursuits, as well as business opportunities. It does all this at a fraction of the cost of living in London, which is why so many people are trading life in the capital for a future in Liverpool. Liverpool’s fabulous night life and outstanding restaurant scene add to its superb arts scene and thriving property market. The affordability of property here – certainly when compared with London property prices and rents – is a huge draw.
What is your outlook on the Liverpool property market in 2018?
I’m excited about the future of the Liverpool property market, particularly as we move into 2018. JLL has projected house price rises of 2.5% per annum across the UK for the next five years and Liverpool tends to be ahead of the curve when it comes to increases in value, so the city’s housing market looks to have a very promising ahead!