Property Investment in Liverpool

As a property investment destination, Liverpool ticks all the boxes.

  • The best yields in the country
  • Strong capital growth
  • Rising rental values
  • One of the UK’s fastest growing economies
  • Strong growth in high-value sectors
  • £14bn of inward investment
  • A rising population
  • Job creation on a massive scale
  • Rising standards of living
  • Four reputable universities and a robust student rental sector

Local planners and employers are keen to maintain Liverpool’s economic momentum, and the city is therefore benefiting from huge investments from the local authority, the private sector and academia.

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Inward Investment in Liverpool

In 2019, the FT reported that “private-sector led investment (in Liverpool) has topped £1bn annually for the past four years.” Today, the pace of investment seems only to be accelerating.

The most substantial inward investment programme in Liverpool is Peel Holdings’ Liverpool Waters development – a £5.5bn scheme that is set to transform the city waterfront, creating 20,000 new jobs. Already, it has prompted the construction of new tower blocks, offices and public realm, but residents are just seeing the start of this 50-year transformation.

Associated with the project is the construction of a new Isle of Man ferry terminal, close to the city centre. The £38 million development will serve passengers, vehicles and freight traffic. Also close by, will be the new £55 million Liverpool Cruise Terminal 2, which will greatly enhance the city’s capacity to attract larger cruise ships with more tourist visitors. The plans are associated with more than £50 million of local road improvements.

Another high profile waterfront development will be the construction of a new home stadium for Everton Football Club at Bramley-Moore Dock. Costing an estimated £500 million, the 52,000-seater stadium is scheduled to open in 2023.

The Tate Liverpool

Other important regeneration schemes in Liverpool include:

  • Liverpool2 deep-water container terminal – a multi-million-pound expansion of the £400m deep-water facility at Liverpool SuperPort.
  • Lime Street Gateway, a £39 million scheme to improve the area around Lime Street Station, the arrival point for millions of visitors every year.
  • Paddington Village - a £1bn expansion site, which is creating 1.8 million square feet of modern facilities for science, technology, education and healthcare.
  • Liverpool Upper Central, a 56-acre development site designed to give the city’s Knowledge Quarter room to expand. It is expected to kick-start £2bn of further regeneration, and to support the creation of 7,000 new jobs.
  • The Baltic Triangle, Liverpool’s digital and creative quarter, which has seen £128 million of new development work, with an additional £62 million now in progress.
  • Ten Streets – a 1 million square foot development area close to the docks, set to become a new ‘creativity district’ for start-up businesses. It is expected to support the creation of around 2,500 new jobs.
  • A new tidal-power barrage in the River Mersey, awarded development funding in February 2020.
  • The Clatterbridge Cancer Centre – a new specialist treatment centre, now being built as part of a £162 million investment in improved cancer care for Merseyside and the wider region.

More examples are listed in our Liverpool Property Investment Guide, but these help to illustrate the scale of work now taking place in the city. Ultimately, this should mean rising employment, a new influx of people seeing good jobs, higher average disposable incomes and, of course, greater demand for property.

Business Growth in Liverpool

Merseyside is home to more than 65,500 businesses, many of which are based in and around central Liverpool. In 2019, data compiled by Inform Direct using ONS and Companies House figures, found that the number of businesses operating in the city had risen by nearly 4% over the previous 12 months – a faster rate than at any time in its history.

Since then, the city’s mayor, Steve Rotheram has announced the launch of a £75 million fund to support business growth. The biggest such cash injection for 20 years, it will provide business loans, fund training and apprenticeships, and provide direct support to fast-growing enterprises. It is expected to help create 2,000 new jobs overall, especially in higher-paid, knowledge-based industries.

Liverpool City Centre & Docks

Growth Sectors in Liverpool

Liverpool has seen a pronounced strategic shift in its economy. No longer defined by its maritime history, Liverpool has a thriving economy, with growth focused on high-value sectors such as:

  • Advanced manufacturing and engineering
  • Creative and media
  • Digital and ‘big data’
  • Education
  • Health and life sciences
  • Logistics
  • Low carbon energy
  • Professional business services
  • Tourism

Manufacturing in Liverpool is worth over £3bn per annum. It supports three thousand businesses and 50,000 jobs. Now, academia, life sciences, pharmaceuticals and digital industries are all working with advanced manufacturing businesses to add value and create centres of excellence in smart-automation and virtual engineering.

Major employers include Unilever, Pilkington, Ineos, Astra Zeneca and Jaguar Land Rover. However, smaller, high-tech businesses are growing fast, thanks to investments such as the Materials Innovation Factory - a £65 million collaboration between the University of Liverpool and Unilever. Designed to accelerate the expansion of knowledge-based industries, it is drawing together around 300 researchers to help lead new scientific and commercial innovations.

The creative, digital and media industries contribute £1.8bn per annum to the city economy and have grown by 7% per annum since 2010. Responsible for one of the UK’s fastest rates of new business start-ups, they have been supported by strategic investments such as Sensor City – a £15 million enterprise zone – a new £50 million film studio, and a £7 million commercial development known as Giga Village.

The life sciences are another important sector in Liverpool, which is home to Royal Liverpool University Hospital, numerous specialist medical facilities and The Liverpool School of Tropical Medicine. Consequently, its life-sciences sector is now one of the biggest and most successful in all of Europe, generating £3bn of annual revenues and supporting 6,000 specialist jobs.

Focused around the waterfront, Liverpool’s energy and sustainability cluster is driving important innovations. It has already created one of the world’s largest offshore wind farms and it is now driving progress on an innovative tidal energy barrage. In all, Liverpool’s low carbon sector is worth around £2bn per annum and supports a workforce of well over 27,000.

Liverpool’s professional services sector is valued at £8bn per annum, sustains 12,000 companies and supports over 107,000 jobs. Growth in the sector is expected to create more than 20,000 new jobs by 2040. A report by Oxford Economics for the local enterprise partnership notes that the city's business and professional services will be worth an extra £4.6bn by 2036.

Please download your FREE guide to property investment in Liverpool by completing the form below

Liverpool’s Port and Logistics

Although Liverpool is embracing high-value, future-focused industries, it hasn’t forgotten its maritime heritage. A recent report declared Liverpool to be "stand out region" with respect to sea freight, and noted that the city will be crucial to the UK economy in the years following Brexit. It estimates that when combined with its logistics connections to the wider Northwest, this growing sector contributed £2bn to the broader regional economy, and helped to sustain 52,000 jobs.

Liverpool’s Tourism Market

2019 was a record year for tourism in Liverpool. LCR Local Enterprise Partnership reported that: “The region’s visitor economy is now worth over £4.9bn… and supports over 57,000 jobs.” It pointed out that the number of visitors welcomed to the city in 2019 (over 67 million) marked a 5% increase on the previous year. It also noted that “over the last 5 years, there has been a 28% growth in the economic value of the visitor economy.”

Now, with the prospect of future improvements, including a new cruise liner terminal and the possible expansion of Liverpool John Lennon Airport, this already vigorous sector could soon be gaining even more momentum. For landlords with an interest in short-stay accommodation, this could be especially good news. Rising numbers of overnight visitors will boost demand for serviced apartments and short-term lets, which – in Liverpool – are currently delivering the best yields anywhere in the country.

Liverpool’s Housing Market

On all the key measures – affordability, rental demand, yields and potential for capital appreciation – Liverpool is performing very well.

For the second year running, Liverpool has led the field in Totally Money’s UK Buy-to-Let Rental Yield Map. Liverpool postcodes take six of the top 25 places in its 2019-2020 league table – more than any other British town or city. The country’s number 1 slot is taken by Liverpool L1, which with average asking prices of £90,000 and rents of £750, is delivering gross yields of 10%. Not far behind are Liverpool L11 (yields of 8.67%) and L6 (8.12%).

On the measure of capital appreciation, Liverpool is also a high-performer. According to Hometrack’s UK Cities House Price Index for September 2019 Liverpool and Edinburgh both saw price gains of 5.8%, a better result than any other UK city

Buy-to-Let Investment in Liverpool

Understandably, Liverpool has earned itself a place among the UK’s top property investment destinations. Top-ranking yields, strong price gains and the prospect of further capital growth are hard to ignore.

But on top of all that is the city’s spectacular performance in the short-stay rental market. Buy-to-let investors with property in parts of Liverpool have been enjoying yields as high as 27.2%. That’s according to figures recently published by Portico Host, quoting results achieved by landlords in the city’s Fairfield district. Short-stay accommodation is often a very profitable form of investment and Liverpool’s excellent tourist credentials make it an ideal market to consider.

Student Property Investment in Liverpool

Merseyside is home to four universities with sizable student populations, which help to maintain a steady, profitable rental market.

  • The University of Liverpool: 35,000 students
  • Liverpool John Moores University: 18,945
  • Edge Hill University: 15,220
  • Liverpool Hope University: 5,100

The University of Liverpool is one of the world’s top 200 universities and is a reliable source of rental demand. However, it’s also a key driver of economic investment. In 2016, Oxford Economics found that the University generated £652 million GVA to the City Region, and supported one in ten jobs in the city.

The University recently announced plans for a £1bn expansion of its estates that will take place over the next 15 years. This includes significant investments including the £8m Digital Innovation Facility and the £22m Arts and Humanities Centre, both of which are now under construction.

What are Liverpool’s Property Market Predictions for 2020 and Beyond?

Looking at Liverpool’s economic strength, the steady growth of its industries and the massive inward investment now taking place, there is every reason for property investors to expect excellent returns in the coming years.

As a mark of their faith in Liverpool’s future, commercial investors are committing literally billions to the city. But for individual property investors, too, all the indicators are strong and reassuring.

Looking ahead, JLL expects Liverpool to see price gains of around 2% in 2020, while Zoopla has predicted that Liverpool, Glasgow and Belfast could share the UK’s biggest rises – averaging around 4% over the course of the year.

Please download your FREE guide to property investment in Liverpool by completing the form below

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