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General news

UK property investment news and trends

Redevelopment, regeneration and reimagining are all words that could be associated with Liverpool’s changing property market in the last few years. Whether it’s the new plans surrounding the waterfront docklands, the changing face of the city centre or the emergence of collaboration and skill sharing as a concept between universities, there’s a feeling that something has changed for the better in Merseyside in recent times.

This has helped give a boost to the property market, where higher volumes of students, more skilled workers and new investors have been coming to the city in droves. But how has this changed the market? Here, we take a look at trends evident in Liverpool over the last few years, and how the market may develop further in years to come.

Rental prices

One of the biggest boosts Liverpool has seen in recent years has been in the rental sector. Growing numbers of businesses, a rise in student numbers and a huge demand for skills in emerging digital, science and tech sectors has meant a swell of new people coming to live and work in Liverpool.

This has opened the door to developers and investors in the city’s private rented sector, who have been able to come into the market and enjoy steadily increasing returns, as demand pushes rents ever higher. With two-thirds of all homes in the city centre, according to JLL Residential, now rented privately, it’s not hard to see why rents are climbing in relation to competition among tenants.

In the space of the last three years, Liverpool has enjoyed some of the best rental price increases seen anywhere in the UK, the report from JLL shows. It says that as of the end of 2016, the average rental price in Liverpool is £695 per calendar month for a one-bedroom flat, and £900 per month for a two-bedroom property, which means there have been some big leaps, particularly in the last 12 months.

Rental growth prices

While both 2014 and 2015 saw impressive rental growth for investors of 7.9 per cent and 7.3 per cent respectively, it was 2016 that really hit the mark. Prices grew by 10.3 per cent throughout 2016, giving investors not only far stronger returns on their investment, but also hope for the future of the rental market and their long-term income.

Property prices

Rising house prices are a good indicator that the market in general is strong. Whether it’s the fact that more people are buying their own home, or that investors are spending more and expanding their portfolios for the lettings market, the fact that prices are going up is indicative of a healthy property sector. And this is something that has also been seen in Liverpool in recent years.

According to JLL Residential’s report, over the course of the last three years, the average property has risen in price by four per cent, 13.5 per cent and 6.7 per cent respectively. This means that as of the end of 2016, the average price of homes in Liverpool sits at £145,000 for a one-bedroom property and £230,000 for a two-bedroom home.

This growth is evidence that even as more people choose to rent, the market is keeping up its health. Overall, more money coming into the sector is good news, as investors increasingly buy homes to rent out, inflating prices as demand climbs. This has no doubt been fuelled by things such as the shortage of homes to rent for the city’s 57,000 students, and the rising number of people coming to Liverpool as part of the so-called ‘Shoreditch exodus’, moving their skills away from London and into the regions.

What does the future hold for Liverpool?

Although the past few years have been great for Liverpool’s property market, it’s still a relatively new sector in terms of regional growth. Other areas such as Manchester and Leeds have been increasing in value for investors for a number of years as they were flooded with new businesses and rising student numbers. However, it was only the regeneration and redevelopment of Liverpool in the last couple of years that really kickstarted the city.

And it would appear, according to JLL, that the fact it was a couple of years behind means that it still has plenty of room to grow in the future and mature as a market. A “rapidly transforming city”, Liverpool is set to see wave after wave of property investment over the next few years as billions are spent on helping it realise its potential. And this should help to push the property market on even more.

House price forecast

Rental growth forecast

According to the report, over the course of the coming years, Liverpool’s property market should continue to grow at pace, with forecasts that prices for purchasing will rise by 22.8 per cent between 2017 and 2021, and that rental costs will climb by over 17 per cent. With this in mind, and the fact Liverpool is a market on the rise, could now be the time to invest in the Merseyside city?