Is now the time to invest in Liverpool property?

For my article this week I want to put the spotlight on Liverpool as a promising investment option, having read several reports recently looking at its economy and property sector and how well they seem to be performing – especially when compared to the rest of the UK.

Liverpool’s regional economy is reportedly worth approximately £30bn and grew more in the years between 1998 and 2016 than any other major British city (except London, Edinburgh or Cardiff). The city has benefited from a significant amount of public and private investment over the last ten years and has flourished into a cultural capital with a young and growing population. Businesses in the finance, manufacturing, digital and creative sectors have been flocking to the city and the council seems keen to sustain the momentum with its Local Plan stating that there is currently £14bn worth of regeneration projects on site or in the pipeline with the target to create 35,000 new homes and 38,000 new jobs. The growing population, job opportunities and vibrant cultural scene have been feeding into healthy property sectors as I look at below.

Liverpool’s Office Market

In 2018 office take-up in Liverpool’s commercial district increased an impressive 46.8% from 2017, which is perhaps why a Grade II-listed 359,558 sq ft central office building changed hands last week for £68m – one of the highest prices paid for an office building in the city. The buyer, Ashtrom, said it was the company’s first UK acquisition and that it sees a bright future for the city’s commercial office market and plans to acquire more properties with similar characteristics to grow its UK portfolio. US investment in Liverpool property has seen a sharp rise in the last year with 2018 seeing foreign investment from the US totalling £156m, a huge jump up from £15m invested in 2017. Positioning Liverpool as a desirable place to live and work is something the local government are hoping to bolster even more with the Mayor of Liverpool submitting an ambitious £230m ‘Green City Deal’ bid to Boris Johnson last week. The plan focusses on achieving carbon neutrality, delivering jobs, cleaner air, better health, smarter travel and green spaces – all of which would only serve to improve the quality of life of Liverpool’s residents and workers.

Liverpool’s Housing Market

Last year Liverpool’s housing market saw the strongest growth in England, with prices rising by 4.9%. However this doesn’t mean property prices in Liverpool are prohibitively high, in fact they are some of the most affordable in the country meaning there’s a lower entry cost and lower level of risk. Rental yields on buy-to-lets are also strong with an average of 5%. JLL also projects that house prices in Liverpool will grow 12% by 2023.

Liverpool’s PBSA Market

With three well-known universities, Liverpool’s student accommodation market is looking very solid. Demand for student places in the UK, and therefore student housing, was up this year with Knight Frank’s most recent UK Student Housing Update showing that for the 2019/20 academic year there were nearly 2,500 more applications to start full time undergraduate courses at UK universities than the previous year, driven by a record number of applications from outside the UK. In Liverpool, the student population is growing even faster than the UK’s as a whole with student numbers having risen 6% in the last two years. The city has a combined student population of 70,000 and student accommodation near the city centre has average rental yields of 9.33%. Some areas even command yields of 12% – a hard return to ignore.

Liverpool’s Hotel Market

In the city’s hotel market Knight Frank ranked Liverpool among the top 5 most attractive cities in its UK Hotel Development Index 2018 and according to Visit Britain Liverpool attracts over 800,000 visitors a year. In addition, in 2018, every month (with the exception of January) set a new record for rooms sold with average occupancy at 81%, up 3% on the previous year.

When looking into the Liverpool property market I’ll admit I was impressed by these statistics and will enjoy monitoring the market to see if 2019 delivers similarly impressive results. If you’d like to invest in Liverpool property, ambT Property Partners currently has available for investment a mixed-use development in the city centre. The development is already under construction and consists of a 155+ key hotel and 400+ bed PBSA. You can view full details of the investment opportunity by joining our Investors Club or by contacting a member of our team via info@ambtpropertypartners.com.

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