Vesta Property | Investment Guide for Liverpool | Vesta Buy To Lets

Welcome to Liverpool

Liverpool City is a place where smart, creative people and innovative businesses come together in Europe’s most welcoming, business-friendly location.

A city of opportunity

One of the UK’s core cities and an integral part of the Northern Powerhouse

Liverpool is surfacing itself as one of the most thriving cities to invest in, offering some of the top investments. The property hotspot is culminated by a booming market and robust rental yields – it is hardly surprising that the popular city’s hive of activity presents unmissable best property opportunities for investors.

The Liverpool City Region is one of the UK’s top four growth hot spots, according to data from global design and infrastructure consultancy Arcadis. It placed Liverpool ahead of Manchester and London as an investment destination, measuring growth potential against the six key pillars of workforce and skills, infrastructure, business environment, place, city brand and housing.

The city’s unique business benefits, market opportunities and outstanding quality of life attracts a huge number of businesses, students, entrepreneurs, and professional workers to the area each year. Between 2008 and 2012 the population increased 3.3% and, as a result of this massive population expansion, demand for rented accommodation has grown exponentially.

Liverpool and Merseyside are important parts of the Northern Powerhouse, with businesses in the region delivering vital skills, jobs and growth. Since 2010, 50,000 new jobs have been created in the Liverpool City Region alone, and inward investment has increased by 6% in the North West as a whole in the last year.

Robert Jenrick, Exchequer Secretary to the Treasury, July 2018

Key Insight

OPPORTUNITY

over £1 billion

Investment is attracted every year and over £15 billion of investment opportunity to deliver some of the UKs largest and most ambitious schemes

ECONOMY

£149 billion

is the worth of the Liverpool City Region economy the UK's second largest regional economy

POPULATION

1.5 million residents

the population has doubled over the last decade, with almost 900,000 being between the age of 16-60

UNIVERSITY

90,000

Students attend 6 universities, and produce a talented pipeline of 30,000 graduates each year, as well as having access to 250k studetns within 30 miles

CONNECTIVITY

200+ flight destinations

10 motorways within 10 miles, 10 rail linked terminals and £1 billion of new ports and infrastructure

TOURISM

£7.5 billion

Spent on hospitality and leisure attracting 50 million vistors every year and ranked 4th 'Friendliest City' in the world by Rough Guide's 'Top Global Cities to Visit'

Population & Students

Liverpool is one of the fastest growing UK city outside of London.

Liverpool has 1.5 million residents, with almost 900,000 being between the age of 16-60 years old. In the wider functional area, the catchment increases to 2.5 million people, of which 1.4 million are of working age.

Liverpool is the fastest growing UK city outside of London and its population has more than doubled in the last decade, fuelled by the rise in jobs, young professionals and students.

Liverpool has a talent pipeline that is broad, deep and increasingly future-proof thanks to skills initiatives and excellent schools, colleges and universities.

Companies invest and reinvest because of the exceptional quality of recruitment and levels of retention that they experience. Universities produce a pipeline of 30,000 graduates every year, with the region boasting access to around 250,000 students within a 30 mile radius of Liverpool.

University of Liverpool is a globally-ranked research institution associated with nine Nobel Laureates; Liverpool John Moores University is one of the largest, most dynamic and forward-thinking universities in the UK; Liverpool Hope University is ranked second in the UK for graduate employment; and Edge Hill University is one of the select few to have held the coveted ‘UK University of the Year’ title.

Exceptional quality of life attracts new people, businesses and investment to Liverpool.

Invest Liverpool

Economy

The economy is now worth more than 2.3 times its value when compared to 1998

The economy in Liverpool really has transformed over the last 20 years, and is now worth more than 2.3 times its value when compared to 1998.

Such growth to the economy follows a surge of investments and interest from big businesses and wealthy individuals in the area, which has indeed developed the city’s business industry.

Liverpool City Region is at the centre of the UK's second largest regional economy, with a regional economy worth more than £149 billion with 236,000 businesses and an immediate access to a staggering 6 million people.

Liverpool has seen many successful businesses relocate to the city, leading Liverpool to have the highest proportion of fast-growing businesses in the UK, with numbers increasing by more than 55% between 2009 and 2015.

New Investment Projects Expands City Centre

Peel’s Liverpool Waters Project

£5.5 billion

2.3km waterfront transformation

Everton Football Stadium

£300 million

Proposed plans for new stadium further developing the Docklands area

Liverpool 2

over £1 billion

Deep-water container terminal enabling the largest vessels to call directly in the heart of the UK

Business & Employment

Liverpool has been trading with the world for over 200 years and has developed a wealth of experience

Liverpool and the surrounding region is the number one recipient of foreign direct investment in the UK after London and the Southeast. Home to global Fortune 500 companies complemented by a large, diverse base of innovative SMEs and start ups.

Businesses are attracted to Liverpool by market opportunities, a low cost base, international connectivity and an outstanding quality of life.

As one of the best connected cities in the UK, Liverpool is firmly linked to global markets with many multinational companies. Liverpool boasts a broad range of industry sectors including: financial and professional services, low carbon, digital and creative industries, advanced manufacturing, life sciences, logistics and leisure. Major investors include Astra Zeneca, Pershing BNY Mellon, Jaguar Land Rover, Maersk, Siemens, Sony and Unilever.

Liverpool City Region is home to the UK's most digitally skilled city and the second fastest growing tech cluster in the UK.

The city is ranked No.1 in the UK for both entrepreneurship and business growth, and renowned for cutting edge technology and R&D, topping the Northern league table for business innovation. There is no shortage of talent either with 6 million people within the travel to work catchment and 13 universities producing over 70,000 graduates per year.

This [devolution] deal will help the Merseyside economy make the most of the talent and opportunities it has on its doorstep. Equipping people with the skills they need to get on is essential.

George Beveridge, Deputy Managing Director, Sellafield Ltd and CBI North West Chair

Location

Liverpool has always been a gateway - geography and natural assets have shaped commercial and cultural life for centuries

It’s estimated that in the ten-year period running up to 2023 the number of people visiting, living and working in Liverpool’s city centre will have grown 25%.

Liverpool was 4th Most visited City in the UK (hotels.com 2016) with excellent connectivity by rail, road, air and sea.

It’s estimated that in the ten-year period running up to 2023 the number of people visiting, living and working in Liverpool’s city centre will have grown 25%

Liverpool City Council

Connectivity & Transport

One of Europe’s fastest growing destination cities, with an impressive network of connections to international markets

Liverpool sits front and centre of large scale regeneration and construction projects, thanks to the promotion of the prestigious Northern Powerhouse.

The region is experiencing £5.5 billion of regeneration in terms of revitalising the cities tired infrastructure, archaic transport links and forgotten culture to a modern, dynamic waterfront quarter - this project alone is estimated to provide at least 17,000 full time jobs, creating a substantial boost to the city’s expanding economy.

The new deep-water Liverpool 2 container terminal gives access to a new port and logistics infrastructure, which can service 95% of the world’s largest container ships, thanks to more than £1 billion of infrastructure investment.

For international connections there is a choice of both Liverpool and Manchester airports which are within a 45 minute drive. Liverpool John Lennon Airport has flights to all major European business centres and Manchester Airport has direct flights to 200 destinations and extensive freight and logistics facilities.

Liverpool is within easy reach by rail and an extensive motorway network. London is just two hours away by train – with services every hour. Direct rail services to Manchester, Birmingham, Leeds, Sheffield, Nottingham and others. Motorway connections put the vast majority of UK cities from Glasgow to Southampton within four hours’ drive time.

Property Spotlight

Liverpool's high student population and house prices make the city a dependable market for landlords

Property investment in Liverpool city revolves predominantly around the young and professional workforce, with a whopping three quarters of people living in the city aged 17-29. With a population that has doubled in the past decade; partly down to the economic success of the city, as well as the attraction of Liverpool’s four universities, there is great demand for rental property due to this readymade target market of millennials.

A recent report from Private Finance shows that Liverpool is the best city to invest for high rental returns. As house prices and mortgage costs have the greatest influence on rental returns, Liverpool takes the top spot as it has a combination of a low average price and comparably high rent.

Not only does Liverpool's high student population make the city a dependable market for landlords, but its house prices are relatively cheap when compared to many other areas of the UK.

Six of Liverpool's postcodes were ranked in the top 25 best buy to let areas for 2018, according to a study conducted by Totally Money (that looked at 580,000 properties across England, Scotland, and Wales to find the areas that offer the highest buy-to-let yields).

L7 and L6 steal the top two spots, delivering an average rental yield of 11.79% and 11.52% respectively. L7 covers Edge Hill, Fairfield and Kensington - and L6 - which covers Anfield, the city centre, Everton, Fairfield, Kensington, and Tuebrook – thanks to their proximity to the city's three universities.

This is Money dug further into the financials and found that median sale values in the city's top five postcodes range from around £104,000 to £135,000, far below the UK average of £228,000. With these postcodes, Landlords can typically expect rental yields of 7.4 per cent to 9.8 per cent.

Property Insight

MEDIAN GROSS YIELD

5.7 % (-1.1%)

Median gross yields in L6 and L7 are the top performing areas in the UK achieving 8.3% and 7.1% respectively (REalyse - Feb 2019)

MEDIAN PRICE PAID

£134,000

Median price paid has grown steadily over the last 5 years (£121k - £134k) showing +11% growth

ASKING RENT

£597 (+1%)

Median rent has grown over the last 12 months and 10% over the last 5 years

House Prices

Median sale values in the city's top five postcodes range from around £104,000 to £135,000, far below the UK average of £228,000.

The earnings to house price ratio in Liverpool is one of the best in the UK, with properties typically costing around 4.8 times the local annual salary.

Rental Yield

Liverpool continually ranks as the best place in the country for landlords wanting to earn the highest rental yields.

Landlords can expect rental yields of 7.4 per cent to 9.8 per cent.

Demand

With so much going on in the city, including a booming business industry and an increase of 20% in student numbers [in last 12 months - May '18] Liverpool has seen a big increase in rental demand.

Price Paid

Median Price Paid (previous 5 years)

Median house prices have grown 11%

Median Sales Listings (previous 5 years)

Sales listings have steadily continued to grow over the last 5 years as more stock is being built around Liverpool

REalyse - Data accessed 14/02/2019

Asking Rent

Asking rent has performed steadily until November 2017 and has seen a growth of 10% over the last 5 years

Population has doubled over the last decade and demand for rental property can been attributed to the growing millennial professionals and students.

Asking Rent

Rental Listings

Rental listings started decreasing significantly in October 2017 where asking rent has started to increase around the same time demonstrating the demand within the city.

REalyse - Data correct as of 14/02/2019

Property Overview

Overview by property type in the Liverpool L area (12 month average)

REalyse - Data correct as of 14/02/2019

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Glossary

£/sqft Paid

Median sold prices on a £/ sq ft basis by property. Calculated by combining Land Registry data with property listings and EPC data to determine the number of rooms, type, size and sales values. Updated monthly in arrears

Price Paid

Median sold price by property type. Data from Land Registry. Updated monthly in arrears.

Discount

The difference between the median asking price and median sold price by property type. Calculated by matching property listings (data from c. 20 different sites and agents) with sales records from Land Registry. Updated monthly in arrears.

Gross Yield

Median gross yield by property type. Calculated from the asking price data for asking rent properties of a similar type (data from c. 20 different sites and agents). Updated monthly in arrears.

Supply

The average number of property listings for sale (from c. 20 different sites and agents). Updated monthly in arrears.

Transactions

The average number of sales recorded by the Land Registry (data from c. 20 different sites and agents). Updated monthly in arrears.

This report was written in February 2019 and is based on evidence and data available to Vesta Global Ltd at the time. It uses certain data available then and reflects views of market sentiment at that time. Any forecasts or projections of future performance are inherently uncertain and liable to different outcomes or changes caused by circumstances whether of a political, economic, social or property market nature.

Please contact Vesta for sources.

Important Note

All information contained in this website is provided as a guideline only, is based on estimates and assumptions, may not be accurate or complete, and is subject to change. We make no representations or warranties with regards to this information, expressed or otherwise. A buyer who relies on such information does so at their own risk. Buyers are advised to seek independent financial advice and should undertake their own due diligence.

Your capital is at risk. Property values may decline and the property might not be able to be rented at amounts sufficient to cover debt interest costs, operating expenses and liabilities, and might not result in a positive cash flow. Property is an illiquid asset and should not be viewed as a short-term investment.

In no event will we be liable for any loss or damage, including without limitation any loss or damage arising directly or indirectly out of or in connection with the use of this website and the information contained therein.

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