When ‘Merseyside’ crops up in conversation, people’s thoughts probably most often tend towards Liverpool and all the cultural, economic and sporting associations that go with it. And that’s absolutely understandable, given the city’s dominant influence on the area. It’s undoubtedly the main driver of the local economy, a thriving centre for research and innovation, and the principal centre for employment.
However, for property investors, opting only for the best-known locations is seldom an intelligent strategy. Look a little further afield – at surrounding towns and villages – and a host of other good opportunities often appear.
This is unquestionably true of Merseyside, whether it’s the seaside resort town of Southport, the traditional shipbuilding town of Birkenhead or one of the many communities to be found inland or on the Wirral peninsula.
They all benefit from being part of the Liverpool City Region, which has become a regional economic powerhouse. Despite Covid and other challenges, LCR has been forging ahead with regeneration work and securing inward investment from both public and private sources. The LCA Combined Authority writes:
On top of our £900 million devolution deal, (we have) secured more than half a billion pounds in additional funding from government, including:
£173 million in Transforming Cities Funding, which we are using to modernise and improve the way we travel in and around the city region.
A share of £300 million to connect Liverpool to the HS2 network, which will also link in to Crossrail for the North.
The investments that we’ve already made in our first three years will deliver 9,000 jobs and 5,500 apprenticeships for local people.
In all, the City Region is home to 1.5 million residents, and its £28bn economy supports around 650,000 jobs. It has attracted over £400 million in investment for the creation of the Liverpool 2 container terminal, £429 million for the Royal Liverpool Hospital, and £340 million for improvements to local rail networks. The Mersey Waters Enterprise Zone is one of the largest in Europe, the region produces 30,000 graduates a year, and it’s home to the second largest wind farm cluster in the world.
The list of credentials and achievements goes on but, crucially, many of them don’t arise from Liverpool’s city centre. Others stem from outlying industrial parks and conurbations; places such as St Helens, Speke, Birkenhead and Sci-tech in Daresbury.
In short, Merseyside and the Liverpool City Region draw upon strengths from their many constituent parts, and they are successful precisely because of it. Different areas make different contributions – scientific, digital, academic, cultural and more – but planners have been keen to ensure that they all function as part of a greater whole.
The Wirral Peninsula
Wirral as a distinct local authority area begins just to the northwest of Ellesmere Port (which is formally in Cheshire) and extends out to the coast as far as Hoylake and New Brighton. Though small at just 60 square miles, it comprises a diverse range of neighbourhoods, from Birkenhead’s industrialised dock areas to salubrious residential areas on the western coast – communities such as Neston, Thurstaston and Heswall.
Broadly, the eastern coast – which forms one bank of the River Mersey – tends to be more developed and urbanised, while the western coast is considerably greener and less populous. The east has tended to attract the lion’s share of business and industrial investment, and it boasts faster connections to Liverpool’s docklands. By contrast, the western shore is home to stretches of wild coast, nature reserves, parks and golf courses and, as such, it is a popular destination for people seeking a quiet and attractive place to live.
This dichotomy between the two sections of coast is illustrated in average house prices*.
- Birkenhead: £125,386
- New Ferry: £127,886
- Tranmere: £110,308
- West Kirby: £355,222
- Thurstaston: £661,358
- Neston: £448,605
- Heswall: £362,579
* Source: Zoopla, August 2021
For property investors, the peninsula therefore offers considerable choice. For those prioritising yield, then the more affordable properties towards the east will often deliver the better results. For example, in the CH41 outcode – which encompasses Claughton, Seacombe, Tranmere, Woodside and part of Birkenhead – LiveYield reports that gross returns are averaging around 8.0%. By contrast, in CH61, which is home to some of the area’s more expensive homes, yields may only be half that.
On the other hand, investors who are prioritising capital appreciation have tended to see the highest gains in exactly these sorts of higher-priced markets. Zoopla, for example, estimates that in Heswall, prices rose by an average of 4.25% year on year. In percentage terms, that’s only a mid-ranging performance but in absolute cash terms, that equates to an impressive annual increase of £14,795. Rightmove estimates that prices have risen even faster – by around +6% - and Home.co.uk estimates that in the 12 months to May 2021, average values for all property types rose by an exceptional +24%. In absolute terms, that marks a colossal rise of £60,269.
These figures are an average of all property types but they mask considerable variation. It’s been well documented that, since the Covid pandemic, housing tastes have changed in favour of more open space and larger homes. Consequently, it’s little surprise that the greatest gains appear to have been made at the top end of the local market.
Again, taking Heswall as an example, the best sellers have tended to be larger detached homes. Zoopla records that detached houses saw a price increase of 6.35%, compared to the ‘all types’ average of 4.25%. Detached homes rose in value by an average of £30,296 in a single year. By contrast, semi-detached houses saw gains of 5.15%, and terraces gained only 3.33%.
However, we need to treat these figures with a pinch of salt because they are based on relatively small numbers. Heswall is not a large community so the figures are hardly statistically significant. Only 16 flat sales took place in Heswall over the preceding 12 months, and only 11 terraced houses were sold. Given such data, it’s easy for one or two outlying results to skew the averages.
According to Home’s data, there were not enough sales of flats or terraces to produce a meaningful average. However, the company is prepared to offer growth figures for larger properties and, here, the results are impressive. Between May 2020 and May 2021, it records that detached homes in Heswall rose from £258,317 to £401,000, which is a gain of +55% - or a frankly astonishing £142,683 in a single year.
Again, the small data sample might not yield truly accurate results, but the general trend is more than evident. People are increasingly keen to move to the area, especially after their experiences of lockdown, and they have been prepared to pay large sums do so.
For investors, two obvious questions that arise from this are: what has made Wirral’s western shore so attractive? and will it continue to be a market worthy of consideration? To answer them, we need to look at the town in more detail.
The town of Heswall had a population of just over 13,400 at the time of the 2011 census – but the figure rises to close to 16,000 if we include the residents of neighbouring Gayton and Barnston. To put that in context, Wirral as a whole is home to around 320,000 people, so it’s obvious that Heswall is a relatively quiet and undeveloped area.
Local schools boast of their leafy surroundings while the town magazine notes the attractions of the area’s numerous parks and ecological sites. One of the best-loved spaces is known as ‘the Dales’, a country park that’s listed as both a Site of Special Scientific Interest (SSSI) and a Local Nature Reserve. Like much of the shoreline here, it looks out over the estuary of the River Dee and, beyond to the Welsh coast.
For residents, access to open space is an obvious attraction. Also nearby are Heswall Beach Ecological Park, Heswall Golf Club, Gayton Park, Cleaver Heath Nature Reserve, Ridgewood Park, the Beacons and a host of sports grounds.
However, the town is also a good strategic base for professionals who want good access to key centres of employment, but who also want a pleasant rural or suburban retreat to return to at the end of the day. This is possible in Heswall because, despite its green surrounds, the town is actually set very close to many of the region’s principal centres of business and industry.
Distances to key locations:
- Birkenhead: 8km
- Queensway Tunnel (to Liverpool) : 12km
- Liverpool waterfront : 13km
- Deeside Industrial Park : 14km
- Ellesmere Port : 15km
- Chester : 20km
- North Wales Expressway : 20km
Economy and Employment
Job prospects in many of these surrounding areas are excellent. We’ve seen already that Liverpool City Region is attracting many millions in investment, and that it expects to create thousands of new jobs in the coming years. That, in itself, is bound to have a positive effect on local living conditions and, as new workers are attracted to the area, it could well drive demand for property even higher.
However, planners in Wirral have not been content to rely solely on the efforts of the LCR Combined Authority. They have been pressing ahead with regeneration schemes of their own, and these should also prompt rising demand for jobs, tenancies and property in general.
The area currently supports over 8,000 enterprises and has an economy valued at around £3.9bn but the local authority has a 5-year plan that aims to deliver continuing growth. Some of these plans focused on the visitor economy and inevitably suffered a setback during the pandemic, but others entailed more tangible improvements to employment sites, infrastructure and important urban spaces.
Key development areas include:
- Wirral Waters
- Birkenhead Town Centre
- Birkenhead Hinterland
- The A41 Corridor
Of these, the largest and most impactful will be the Wirral Waters Enterprise Zone, which is being led by the investment giant Peel Holdings. Valued at £4.5 billion, it will be developed over a period of 30 years and will be one of LCR’s preferred sites for inward investment. It already features new, Grade A office space and a Built Environment Campus for Wirral Metropolitan College, and future planned expansions include additional office space, a Maritime Knowledge Hub and a ‘Marine and Energy Supplier Park.’ Planners expect the project to deliver up to 20,000 new jobs and to drive around £47 million of economic growth.
The regeneration of Birkenhead town centre will also be an important driver of growth. Examining the project in the context of economic value and job creation, the Wirral Growth Company notes that:
The construction value of the minimum Birkenhead Town Centre Indicative masterplan parameters is estimated to be £180m, and the maximum parameters construction value is estimated to be £204m. That gives rise to a monthly average of 220 to 280 gross direct construction jobs for 15 years.
Direct employment of 220 to 280 workers constructing the Birkenhead Town Centre Indicative Masterplan would support the creation of £112m to £138m GVA per annum. We would expect indirect employment and GVA in the supply chain to be of a similar order, amounting to 220 to 270 jobs and £128m to £158m GVA.
These plans recently received a boost in the form of a £25 million Town Deal Scheme grant. This featured in a July article by The Guide Liverpool. It noted that the grant would support a number of capital projects, “with a focus on skills and enterprise infrastructure, culture and improved public realm.” The article notes that:
Over £50m has now been secured towards major regeneration projects in Birkenhead in the last seven months. The £25m announced today follows £24.6m which was awarded through the Government’s Future High Streets fund at the end of last year to support the transformation of the town centre, £8.3m awarded by the Liverpool City Region Combined Authority to support the removal of the flyovers into the town and a further £1m for Town Deal accelerator funds to help bring forward projects.
It’s notable that all of these investment projects focus on the eastern side of the peninsula. However, since Heswall lies only 8km from that eastern shore, residents are still within very easy commuting range and should see benefits from any resulting improvements.
Other Wirral communities earmarked for improvements include New Ferry and Bromborough on the eastern shore, and Moreton near the north-western end of the peninsula.
Other Growth Plans
Before the onset of Covid-19, Wirral Council set itself some key objectives, including (amongst others):
- Creating or safeguarding 5,000 jobs
- Securing £250 million of private sector investment
- 250 new business starts
- Extending high-speed broadband coverage to 98% of residents
Some of these plans have been delayed, but the aspirations remain and, given the small size of the peninsula, any that are realised should produce some dramatic effects.
It isn’t unreasonable to expect some or all of them to be achieved, given time. The area has historically been an important generator of growth, jobs and new enterprises. The council reports that “since 2011 Wirral has contributed some 33% of the total increase in enterprises across the Liverpool City Region.” Thus, it can rely on a strong entrepreneurial spirit that could well support a faster recovery from the pandemic.
Quality of Life
Of course, jobs and economic growth are not the only indicators of an attractive place to live. Access to open space has become a well-publicised preference amongst house-hunters, and Heswall certainly ticks this box. Moreover, its proximity to North Wales puts a wealth of outdoor pursuits within easy reach – everything from climbing to mountain biking, surfing to scuba diving.
Education is another important criterion for people moving into a new area, and here, landlords can point to a choice of schools, all rated ‘good’ by Ofsted. These include Heswall County Primary School, which has won several environmental awards, and four secondary schools within easy travelling distance.
Transport connections are already good, but millions are now being poured into local road and rail networks to speed connections and reduce congestion. Rail passengers can access the Bidston-Wrexham line at Heswall Station, while the M53 promises rapid transit to destinations including Birkenhead, Liverpool, Chester and the wider UK motorway network.
Property Investment Prospects
Heswall offers investors an appealing combination of features. Most notably, it has been delivering high rates of appreciation, particularly at the upper end of the residential market. For those seeking capital growth, it is undoubtedly an attractive market.
The longer-term indicators are also good. The economy is on a clear upward trend and job forecasts suggest steadily rising demand for homes in the area. In addition, the population as a whole is expected to expand. Wirral Council writes that “population projections show that by 2037 Wirral’s total population will stand at 331,200” – which marks an estimated increase of approximately 10,000 residents.
A scarcity of data makes it difficult to predict – or indeed accurately estimate – the extent of demand for smaller sized properties such as apartments. However, the local council does recognise that they are in comparatively short supply – amounting to around 16% of total stock, which is below national and regional norms. As more newcomers descend upon the area to take new jobs, so it becomes increasingly likely that demand for these smaller units will increase.
Some of that demand may be met by properties in more affordable districts such as Birkenhead and New Ferry, but for those who put a premium on their surroundings and quality of life, Heswall and its neighbouring villages will have a distinct appeal. For investors who choose to buy here, the initial investment costs may be higher than in other parts of the North West, but prospects for capital gains should be correspondingly impressive.
Merseyside is increasingly being recognised as a property investment hotspot, and the wider North West is certainly regarded as one of the most rewarding BTL markets in Britain. It has seen some of the highest rates of capital growth, some of the highest yields and, importantly, it is tipped to deliver the strongest price gains over the next 5 years. Savills, for example, expects average values to rise by 28% by 2025.
Heswall is by no means typical of the wider North West market. Prices here are higher and conditions perhaps more akin to those in resort towns further south. Nevertheless, it has clear and impressive strengths as an investment destination, and as market conditions begin to normalise, its appeal should only strengthen.
To find out more about investment opportunities in Wirral or Merseyside more generally, please call our advisory team on 01244 343 355 or to book a free bespoke consultation call CLICK HERE.