It’s no secret that the UK is in desperate need of housing supply. Over the past year, the government has been emphasising the need for more residential building activity in a bid to try meet the increasing demand for homes throughout the country.
However, with prices on the market still quite high and mortgages unattainable for those on a lower income, residents are looking towards rental properties to provide them with accommodation without having to fund a mortgage.
This has opened the door for landlords and investors to make substantial returns on buy-to-let property, with the current demand for homes ensuring that apartments and other developments are snapped up quickly by tenants.
With a pressing need for properties all over the country, why could investing in Liverpool specifically be a lucrative option?
London has traditionally been the area with the highest yields for rental properties, due to its place at the heart of the UK business environment.
However, a changing financial climate has seen more companies moving away from the capital and to the UK’s other regions for business, creating a competitive market all over the country. This leads to residential investment homes growing in value in these regional areas and heightens the need for local available properties.
Areas with top quality universities, cultural attractions and excellent transport links have also become increasingly popular, with young people especially looking to move towards these areas. Liverpool is a city that offers all of these benefits.
The shifting market has been observed in a recent study by online property portal Zoopla, which has revealed some of the areas in the UK with the highest yields for buy-to-let landlords.
Liverpool buy-to-let property
According to Zoopla’s league table of cities with the best buy-to-let yields, Liverpool came in third place among 50 cities when it comes to offering the highest percentage returns, with gross average yields of 8.3 percent.
Furthermore, the Zoopla research revealed that the average asking rent for properties in Liverpool is £605 per month, making the cost of renting much cheaper in Liverpool than in many other cities.
This is sure to see more people opting to move to the city in order to take advantage of the favourable rental rates, which will increase competition in the market and ensure your property investment is filled with tenants quicker.
According to Lawrence Hall of Zoopla, the largest yields are often found in areas where there is high demand for rental accommodation and low property values.
“This allows landlords to purchase investment properties at a reasonable price while rents remain competitive due to the imbalance of supply and demand,” he said.
He continued to say that Liverpool was a prime example of this kind of environment, as it is an area with a large population where many will be unable to afford their own property outright.
“In contrast, areas such as London have lower yields despite some of the highest demand for rental property. This is due to sales prices being so much higher having a significant impact on landlord returns,” Mr Hall concluded.
Demand for properties is also increasing due to the rising numbers of pensioners choosing to live in rental properties in the city.
Research from Prudential has revealed Liverpool has one of the highest proportions of renting pensioners in the country, with many choosing to sell their existing property to increase their retirement income.
Why is Liverpool a good location for investment?
Liverpool has also been thriving in recent years, thanks to an increase in business caused by improved visitor rates.
Albert Dock in particular saw a five per cent increase in tourists during 2013, marking the fourth consecutive year on year growth for the attraction.
Other local tourist draws include; the Beatles Story exhibition, celebrating the work of the world famous pop quartet; the Tate Liverpool, the country’s most visited gallery of modern art outside the UK capital; and the Merseyside Maritime Museum.
Herculaneum Quay, Liverpool
The development is a mixture of one-, two-, and three-bedroom apartments, meaning there are potential investment options for a range of budgets.
Situated on the popular River Walk and in close proximity to the city centre and Albert Dock, properties within the Herculaneum Quay development are sure to be in high-demand in the run-up to its completion – set for 2015.
Offering an assured 7% NET (8.5% Gross) in year one, this investment provides an excellent opportunity for potential landlords to make the most of the current high residential demand in Liverpool.
Fully managed by an experienced Management Company with an unrivalled knowledge of the local area, Herculaneum Quay is a high yielding and hassle-free opportunity that will provide investors will a passive income in the medium term and strong capital growth potential in the long term.
For more information about how to purchase a unit within Herculaneum Quay and to enquire about the latest availability, contact Experience Invest on +44 (0)20 7321 5858 or email email@example.com.