Is Liverpool good for property investment in 2020?

Liverpool Property Investment Docks

Liverpool continues to be one of the most exciting prospects for investors seeking buy-to-let property in 2020.

The city has seen impressive regeneration over the past few years and there are plans for continued redevelopment and new projects across the city, further adding to Liverpool’s appeal and its potential for the future.

Combined with the regeneration of the city itself Liverpool’s economy is also growing creating more jobs, attracting more people to live in the city and students to stay once they’ve completed their studies meaning there is a constantly increasing demand from tenants.

Why Liverpool?

The Liverpool buy-to-let market is becoming one of the strongest in the UK, following the likes of other North West England cities such as Manchester which is now an established investor hotspot that has already seen considerable price growth. In general, the north-west continues to outperform other regions in terms of house price growth.

Parts of Liverpool has been completely transformed in recent years and there are impressive plans for the future too; over £14billion worth of regeneration underway or in the pipeline, according to Liverpool council.

The plans for development include the building of entirely new neighbourhoods which include The Baltic Triangle and Liverpool ONE, which is the largest open-air shopping centre in the UK. Major projects that are currently undergoing continued development include Liverpool Waters and the Knowledge Quarter.

Property prices in Liverpool

Overall Liverpool’s property prices are much lower than the other centres that appeal to investors in the North of England. The lower cost of entry might be appealing to investors who are more wary of risk. The area is also appealing to first-time investors or those with a modest portfolio as it presents a more affordable investment option.

Annual price growth in 2019 for Liverpool is currently around 4.6%, according to HomeTrack, which is higher than most of the UK year on year and is particularly impressive in a year that has been filled with political uncertainty.

With a focus on central Liverpool real estate agent Jones Land LaSalle predicts that property prices will rise by 2% and rents will increase by 3% in 2020. These predictions were put in place before the result of the UK general election.

Liverpool rental market

The growing economy and many interesting job vacancies are attracting young professionals to the city, they staying power is increased by the city’s appeal as a place to live, the culture, vibrant nightlife and excellent shopping facilities are big draws.

These young professionals are boosting the demand for rental property in Liverpool, a trend look set to continuously increase over the coming years.

According to analytics tool PropertyData, Liverpool is one of the highest performing buy-to-let locations in the UK and certain Liverpool postcodes have seen huge rental increases in recent years. The Liverpool L1 postcode has seen average yields increase by over 10% in the past 5 years and landlords are now expecting to achieve a good rental yield in central Liverpool of around 7%.

Baltic Place Liverpool
Baltic Residences in Liverpool’s Baltic Triangle offer investors a slice of the Liverpool market with a huge 20% discount off the RICS valuation.

Good rental yields

The average rental yield in Liverpool across the entire market including all types of properties is circa 5%, compared to locations such as London where the average is around 3% Liverpool is a far better option. Whilst the average is 5% in the Build to Rent sector we are seeing rental assurances of 7% net yield.

The demand for rental property, particularly new builds, in Liverpool is growing as investors recognise the city’s potential.

Student Accommodation Liverpool

Liverpool has a thriving student population and it might be, depending on your investment requirements and preferences, that Liverpool student accommodation is the right investment choice for you. Student accommodation as an investment typically has a lower price to purchase and slightly higher yields but might not see the same capital growth return as the rest of the city.

Natex Student Accommodation Exterior
Natex Student Accommodation in Liverpool. With the student market booming, we have a great hands-off investment

There are several universities located in Liverpool and there are estimated to be around 70,000 students living in the city at any one time. These students create a huge demand for accommodation.

Liverpool has an impressive rate of student retention; many choose to stay in the city and live and work there permanently adding to the demand for privately rented property.

Liverpool property investment 2020

High rental incomes and low property prices – Liverpool presents investors with one of the best opportunities for property investment in 2020.

If you are considering investing in rental property in Liverpool in 2020 please do contact us to discuss the present opportunities and how a Liverpool property investment might work for you. We are available to speak on +44 (0) 2039507939 or send us an email at info@thirlmeredeacon.com.

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