Property investors monitoring Liverpool’s rental market will be buoyed by the city’s surge in business confidence
Liverpool’s position as one of the UK’s leading property investment markets continues to be driven by a dynamic network of heavy industry, academia, and commercial enterprise. A number of leading multinationals, including Jaguar Land Rover, and Eli Lilly operate in the Liverpool City Region, maintaining business confidence and a healthy local economy. The workforce at Jaguar Land Rover’s Halewood plant has more than trebled since 2010, with over 4,200 people employed on the site, and recent investment totaling £130 million. The expansion of the Liverpool2 container terminal ̶ a project so vital to the economic development of the region ̶ has also entered an exciting new phase.
But it’s not just big business making Liverpool such an attractive proposition for property investors, the city is also becoming a leading hub for startups and digital creative firms. Business intelligence provider DueDil recently recorded a 22% surge in new businesses being established in the city in the first quarter of 2017. The study shows there was a total of 4,928 startups in Liverpool in 2016, the figure is projected to rise to 5,998 by the end of 2017.
The connection between tech clusters and demand for residential property is something investors are watching very closely; for example, the transformation of Hackney in east London has been powered by the rapid expansion of the UK’s digital sector around Old Street and Shoreditch. Similar trends have taken hold in Manchester. In previous news, we noted how specialist mortgage lender, LendInvest, had named Manchester among the nation’s top 10 best buy to let investment markets, this coincides with the city hosting one of the fastest growing networks of digital startups anywhere in the UK. Liverpool is following suit. The city’s renaissance is being powered by digital technology companies, particularly those operating around the Baltic Triangle district. With rental yields consistently around the 8% mark, Liverpool offers a great opportunity for property investors looking to bet on the promise of digital enterprise. Furthermore, with the UK government recently announcing a £15 million Northern Cultural Regeneration Fund to boost tech, creative, and cultural industries across the Northern Powerhouse, investors can be reassured the city’s ambition has the support of public money.
Liverpool’s commercial potential is underpinned by a world-class academic infrastructure. Knowledge Quarter Liverpool and Paddington Village are already home to the heavyweights of science and technology, and with further investment in the pipeline, Liverpool will only grow in importance in the years ahead. With around 54,000 students, the potential for purpose built student accommodation (PBSA) is another reason why the city offers property investors such a robust proposition. Experts at RW Invest believe off-plan property investment will grow in popularity as PBSA continues to assert itself as a global asset class.
Investment in industry
There has also been a high level of activity in the Port of Liverpool, offering encouragement to investors keen for the city to remain a key player in the Northern Powerhouse project. Peel Ports Group recently announced that Phase 2 of the Liverpool2 container terminal had commenced work, which once complete, will provide the capacity to simultaneously unload two 380 metre vessels.
The importance of the Liverpool2 container terminal in re-instating the city as the UK’s port of choice cannot be understated. By allowing the world’s largest ships to enter the port, Liverpool2 will consolidate the city’s position as an international transport and logistics hub for generations to come. In a recent visit Liverpool City Region Mayor, Steve Rotheram, welcomed the development as an opportunity to create a new vision for the local economy:
“Liverpool2 once again establishes Liverpool as a great global gateway opening up a new world of trade opportunities for the City Region and the wider UK. This is a transformational project creating jobs and business growth and is integral to the delivery of the Northern Powerhouse vision. Peel Ports’ investment is a huge expression of confidence in the area, underlining how important the maritime and logistics sectors are to our economy.”
Development on this scale is a magnet for further inward investment projects and the creation of new jobs; a rising demand for property follows, especially in the rental market. New opportunities for residential property investors are springing up all of the time, but with the introduction of punitive legislation hampering buy to let investment, a strategic approach becomes increasingly important. Market confidence is still high, however, with a recent report showing that 59% of landlords still feel positive about the buy to let market, with just 11% negative, despite the tax and stamp duty changes.
Location is the key, and Liverpool offers some of the best rental returns in the UK, thanks largely to its thriving business network and expanding population of young professionals.
By Harry Drysdale-Wood |28th August 2017