Welcome to Liverpool
Home to one of the UK’s fastest-growing property markets, Liverpool is a profitable option for Buy-to-Let investors, offering higher than average yields and a positive outlook for capital gains.
Over the last ten years, city living has gained strong momentum in Northern Powerhouse cities like Liverpool. With a rapidly rising population and multibillion-pound regeneration projects across the city, demand for property across Liverpool’s sales and lettings markets is notably strong.
A RAPIDLY RISING MARKET
Liverpool’s private rental sector has witnessed significant growth over the last decade, primarily because of the city’s young and dynamic population. Between 2002 and 2015, Liverpool’s city centre population grew by 181%, outpacing London and the rest of the UK during the same period.
JLL’s Northern England Report estimates that two-thirds of Liverpool’s city centre homes are privately rented, with young professionals and graduates making up the city’s largest rental demographic.
Despite the pandemic, Liverpool has been a leader in house price growth, recording the fastest rising values in the UK. In February 2022, Zoopla reported that property prices in Liverpool increased by 10.3% year-on-year and 32% over the last five years.
Compared to the UK’s average 8.1% house price growth over the last 12 months and 21.5% over five years, Liverpool’s property market has significantly outperformed the rest of the country. Yet, despite rapid gains, housing in Liverpool has one of the lowest average values at £201,634, markedly lower than the UK average of £270,708.
For Buy-to-Let investors, lower entry-level property, high tenant demand, and a positive five-year outlook make Liverpool a unique opportunity for acquisition.
PROPERTY PRICES IN LIVERPOOL INCREASED BY 10.3 % YEAR - ON - YEAR OVER THE LAST FIVE YEARS
HOUSING IN LIVERPOOL HAS ONE OF THE LOWEST AVERAGE VALUES AT £201,634
HOUSE PRICE GROWTH OUT PERFORMED UK’S AVERAGE 8.1% HOUSE PRICE GROWTH
Located in the North West, Liverpool is globally considered one of the UK’s most-loved cities and boasts a rich cultural and historical heritage that few can rival. Liverpool is one of the country’s largest port cities and is famed for being the birthplace of The Beatles and is home to two world-class football teams. In addition, Liverpool has the most extensive collection of museums and galleries outside London and is the UK’s fifth most visited tourist destination by overseas and domestic visitors.
Formally a UNESCO World Heritage site, Liverpool’s iconic waterfront is packed with landmarks, including Liver Building and the Royal Albert Dock, and welcomes millions of tourist and business travellers every year. Over the last 20 years, Liverpool has transformed from a declining port and manufacturing city to become a vibrant, cosmopolitan city, leading the way in scientific research and development and has emerged as a location of choice for start-up businesses.
Since holding the 2008 European Capital of Culture title, Liverpool has undergone a rapid regeneration, receiving billions of pounds worth of government-funded and private investment, with targeted initiatives encouraging the construction of new-build properties, better infrastructure and modernising facilities.
Liverpool has secured upwards of £1 billion of investment in new developments each year over the last few years, strengthening its position as the second-largest regional economy in the North. With institutional investors recognising Liverpool’s potential, £14 billion of redevelopment and regeneration projects currently sit in the city’s pipeline, including the ambitious £5.5 billion Liverpool Waters project and the £1 billion regeneration of the Knowledge Quarter.
Those considering Liverpool property investments should be encouraged by record-breaking levels of investment which are set to create thousands of new jobs and increase demand for housing across the city.
As the second-largest economy in the North, Liverpool has significantly benefitted from the government’s Northern Powerhouse initiative, with over £20 million invested in the Liverpool city region.
Major improvements to infrastructure and £11 million invested into high-growth SMEs will see Liverpool’s economy bounce back stronger postCovid, with GVA expected to reach 6%, compared with an average of just 0.6% before the pandemic. Liverpool is also on track to reach recordbreaking employment rates in 2022, with the creation of an additional 6,000 new jobs this year across a range of sectors.
The proposed extension of HS2 to add new lines to Liverpool as part of Northern Powerhouse Rail will boost the economy by billions, improving connectivity and reducing travel times between key areas, including Liverpool, Leeds and Manchester. If approved, 17,500 new jobs will be created across the North.
In recent months, the government has committed to building a better future for Liverpool and its neighbours, announcing a further £110 million investment through its Levelling Up plan. Regeneration projects have been earmarked in the Merseyside region, plus those living in the centre of Liverpool will benefit from improvements to the healthcare and education systems.
In terms of infrastructure, a renewed promise to decrease travel times between Liverpool and London has been put forward, which will see journey times from Liverpool Lime Street to London reduced from 132 minutes to 92 minutes. One of the biggest changes will be delivered in the shape of a new Freeport, which will generate 14,000 new jobs, plus new initiatives will be introduced to meet the region’s net-zero carbon targets for 2040.
Investors buying property in Northern Powerhouse cities such as Liverpool are able to capitalise on unprecedented levels of investment.
Record levels of investment, the creation of new jobs and long-term government-backed schemes are likely to underpin demand for property across the city and offer plenty of scope for rising rental yields and capital gains in the coming years.
As one of the UK’s best-connected cities, Liverpool has a uniquely global appeal that few cities can rival.
The city’s Liverpool John Lennon Airport and the Port of Liverpool provide a gateway to the world, while a 2-hour fast train connects the city by rail to London. In addition, Liverpool is connected to the rest of the UK via motorways, rail links and regular ferry services, making access to and from the city relatively easy.
The proposed extension of HS2 as part of Northern Powerhouse Rail will reduce travel times and is set to boost the region’s economy and create thousands of new jobs.
As the gap between the North-South divide in house prices narrows, regional property markets like Liverpool are accelerating faster than ever before, offering investors a fantastic return on investment and steady and attractive rental returns.
The benefits of multibillion-pound regeneration schemes have already led to impressive results across Liverpool’s property market, with house prices increasing by 32% over the past five years.
Amidst the country’s post-pandemic recovery, over the last 12 months, property prices in Liverpool increased by 10.3% – the highest increase record on the market. When compared to the average UK property price growth of 8.1%, Liverpool is a clear highlight.
Looking to the future, estimates from Savills reveal that Liverpool stands to emerge as a market leader, with house prices in the North West expected to climb by 18.8% between 2022 and 2026. Compared to the UK’s 5-year average predicted growth of 13.1%, residential Buy-to-Let investment in Liverpool paints a robust picture for long-term growth.
A distinct undersupply of new-build and centrally located housing tailored to the city’s younger rental demographic will provide ample scope for developers and investors alike. As a result, market predictions reflect the buoyancy of the city’s property market, with rental growth expected to rise by 9% between 2022 and 2024 (JLL).
With average property values in Liverpool currently at £201,634 – significantly below the UK average of £270,708 – the market has plenty of room for growth.
For Buy-to-Let investors, house prices and rental growth are effective measures of market demand. With thousands of new jobs in the pipeline and an unprecedented level of government-backed and private investment, the need for high-quality rental property is likely to increase.
People living in Liverpool have rapidly increased over the last 20 years. The city centre population swelled by 181% between 2002 and 2015, marking the fastest city centre increase across the UK. Liverpool has one of the highest concentrations of young people in the UK, with 34% of the population aged between 15 and 34, which is excellent news for those considering investing in the city’s Buy-to-Let market.
With Liverpool on track to be one of the strongest performing economies of the North West over the next five years, the demand for high-quality housing is likely to increase following the creation of new jobs across the city. According to Liverpool City Council, the city centre population is expected to increase by 30,000 people by 2030, making the investment in newbuild accommodation across the city a high priority to keep up with new households.
Best postcodes to invest in Liverpool
With a rapidly rising population, multibillion-pound regeneration projects, plus the creation of thousands of new jobs, there are plenty of options for investors across Liverpool’s property market. In this section, the experts at Surrenden Invest break down the most sought-after locations for rental property across the city and their benefits for investors.
Liverpool’s L1 postcode covers the city centre and spills over into some of the most desirable areas for rental accommodation.
L1 is regularly featured in the UK’s top postcodes for rental returns, consistently outperforming its Northern Powerhouse rivals on the Totally Money UK BTL Rental Yield Map. In fact, three postcodes in Liverpool made it into the top 10 in its most recent rankings.
In today’s market, investors can expect an average yield of 6% (Property XYZ).
Liverpool’s tree-lined Georgian Quarter suburb is the most desirable area for affluent residents, and it’s easy to see why. It is the home of the most extensive collection of original Georgian houses outside London. In addition, it boasts a unique kerb appeal that has attracted the attention of television and film crews with series including Peaky Blinders filmed in this quaint pocket of Liverpool.
Voted the coolest place to live in the UK by The Times in 2019, the Baltic Triangle is a vibrant corner of Liverpool’s city centre. It is a popular location for young professionals and students, start-up businesses, and trendy bars and eateries. Considered the ‘Shoreditch of Liverpool’, this youthful part of the city is renowned for its artistic and trendsetting vibe. In addition, its close proximity to the city centre, the waterfront, and a handful of the city’s university campuses make the Baltic Triangle a Buy-to-Let hotspot for investors.
Liverpool’s Knowledge Quarter is undergoing a £1 billion regeneration which is set to see the appeal of living in the area increase over the coming years. Those residing in this area are within walking distance of large employers, including the Royal Liverpool University Hospital, Liverpool’s Women Hospital, plus the University of Liverpool’s main campus is in the heart of the area. Those considering rental property in this area are most likely to rent to young professionals, graduates and international students.
With the £5.5 billion waterfront regeneration underway, investors are presented with the opportunity to provide Buy-to-Let property close to where the transformation is taking place to cater to an increase in jobs and businesses that will take up space in this area upon the project’s completion.
Currently under consultation, a new Upper Central District is earmarked to deliver 2.5million sq ft of new development space. It is estimated that this £2 billion regeneration scheme will provide an estimated 7,000 jobs over the next ten years and revitalise the area north of Liverpool’s city centre.
When it comes to tenant demand, cities such as Liverpool, with a large student population and high graduate retention rate, provide investors with some of the most robust private sector rental yields.
Liverpool is one of the UK’s most established city centres for higher education and is home to leading award-winning institutions, including the University of Liverpool, Liverpool John Moores University, Liverpool Hope University, Liverpool University of Performing Arts, and Liverpool School of Tropical Medicine. Its combined student population currently stands at 57,000 – with international students accounting for around 11,000 of the total.
Over the last few years, Liverpool has witnessed a significant rise in people studying in the city. As a significant employer in the North West, the city boasts a high graduate retention rate of 31%, with many university leavers remaining in the city for employment opportunities.
For those considering Buy-to-Let property in Liverpool, alongside young professionals, international students and graduates make up the city centre’s rental market, which is an important factor for investors since this demographic is often has the budget to pay a rental premium for quality housing in a convenient location.
As the UK’s leading property consultancy, the Surrenden Invest team assesses regional markets’ performance to help our clients make informed buying decisions. For some time, Liverpool has been on the radar of property investors, and for a good reason.
The low entry-level cost of property in one of the UK’s Core Cities is an attractive incentive, offering investors the opportunity to own high-quality stock in a buoyant market. Those looking to diversify their portfolio with a property in an up-and-coming location like Liverpool will also enjoy the lower Stamp Duty obligation associated with the lower cost of buying.
With demand for rental property underpinned by one of the UK’s youngest and rapidly rising city centre populations, investors and landlords are uniquely positioned to achieve higher than average rental yields. And with property values in the North West offering the strongest five-year house price forecast, investors have the opportunity to secure excellent growth potential.
Liverpool’s strong property market outlook and a pipeline of multibillion-pound investment schemes will enable investors to capitalise one of the UK’s fastest-growing cities for many years to come.
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