Famous for its extensive industrial history, world-class Premier League football and acclaimed music scene, Liverpool has experienced a major overhaul, making it the perfect opportunity for buy-to-let investors. Located in England’s North East and crowned 2008 European City of Culture, Liverpool’s population continues to grow and experience regeneration as a result, and it is now regarded as one of the best locations in the UK to invest in the property market.
The potential profits to house price ratio in the city is calculated as one of the most outstanding in the UK. Properties have an average price of only £118,000, around 4.8 times an annual salary, meaning investors in the buy-to-let market can get much more for their money. In contrast, a typical home in London will set you back an average of £491,000, which works out at around four times more expensive than a similar property in Liverpool. Many investors are now divesting mature assets located in London, as the property market in the capital stagnates.
In 2018, Liverpool experienced a growth in average house prices of 5.9 per cent, well above the country’s average of 4.3 per cent, with experts predicting this trend is likely to continue into 2021. Liverpool also ranks consistently as the best location for high rental yields for landlords. A recently released list of the top ten rental yields in the UK was dominated by Liverpool, with three postcodes in the city making the list. The best rental yields in the UK can be found in the L7 area, which is located just outside the centre of Liverpool, covering up-and-coming areas such as Kensington and Edge Hill. This postcode yields an impressive average of 11.79 per cent in rent.
Postcode L6 yields an average of 11.52 per cent in rent, whilst L1, located directly in the centre of Liverpool, brings an average of 9.36 per cent in rental returns. With high rental demand, good rent prices and lower house prices, Liverpool is an ideal location for buy-to-let investors wishing to diversify their property portfolio. The city also boasts new developments, with properties continuously being brought to the market. Liverpool also joins Leeds, Newcastle and Manchester as a core city targeted for the Northern Powerhouse proposal from the Government, which aims to draw powers from London’s Whitehall to the Northern cities. Mayor of Liverpool, Steve Rotheram, wishes to gain control of Liverpool’s own funding, with the aim of shaping the city’s future, so it can benefit from an increase of government investment in order to better the city’s infrastructure and create more homes.
Liverpool is currently in the midst of a £14bn regeneration project led by the city council, with numerous overhaul and redevelopment projects planned. The city is expected to see a new stadium built for Everton FC, £250m of additional road infrastructure, 10,000 new homes, a further cruise terminal and commercial office space of two million square feet. As well as these projects, the Liverpool Local Plan is expected to create 25,000 new homes and 38,000 jobs by 2033, bringing Liverpool’s population to more than half a million. With the implementation of so many projects, Liverpool’s potential for investors and large returns continues to grow.
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