Home » Liverpool Vs. London: Best Buy to Let Areas 2019
Liverpool Vs. London: Best Buy to Let Areas 2019
When it comes to the best rental yields, UK cities are amongst the most superior locations, but it’s the city of Liverpool which takes the top spot for the best buy to let areas 2018. Totally Money’s Buy to Let Yield Map takes into account 580,000 properties across England, Scotland and Wales to reveal the best buy to let locations in Britain. A go-to source for investors aiming to discover the highest rental yields, UK site Totally Money’s findings have once again pointed landlords in the direction of Liverpool which features five of its postcodes in the top 25.
Liverpool is the only city to rank this many vicinities at such a high level in the chart, demonstrating its dominance in the buy to let market. It owes part of its success to its affordable average property prices which are far lower than other urbanlocations like London which doesn’t rank highly at all for rental returns due to its steep pricing on property. What used to be an investor’s first choice has been replaced on the radar of savvy property investors who realise the promise in Liverpool’s real estate market.
Ranking number one for buy to let rental yields across the whole of Britain is L7 Liverpool with properties in the area potentially able to acquire rental returns of an enormous 11.79%. Providing the answer to those wondering ‘why invest in Liverpool?’, the postcode which is made up of Kensington and Edge Hill is an expansive part of the city with its westerly border adjacent to the historic Georgian Quarter where a multi-million-pound investment worked to rejuvenate its ancient streets.
It’s also a postcode including some buildings of the University of Liverpool’s campus and isn’t far from Liverpool John Moores which makes it a prime location for student property. It’s the home of the Liverpool Royal University Hospital which also makes it a hotspot for young professionals looking to live in nearby residential property.
So, why else does L7 have the highest rental return in the UK? Its amazingly low-cost housing is just moments from the main city centre with an average asking price of £118,225. The competitive prices are helping to bump up rental returns to almost 12% and tenants are pleased to find more affordable accommodation than in the likes of L1’s central zone where average prices on property are around £4,000 more.
Aside from affordability, the areas in this winning postcode have several other pull factors for tenants. Edge Hill is branded a conservation area due to its display of historic Georgian architecture, whilst possessing a plethora of English heritage listed buildings. The historic train station has also been regenerated to preserve old features whilst maximising connectivity around Liverpool.
Similarly, the £1 billion Paddington Village which is part of the Knowledge Quarter is in Liverpool L7 and is welcoming a revolutionary Cancer Treatment Centre, Royal College of Physicians building called ‘The Spine’, a Liverpool International College plus a power plant and hotel. Further extensions of the Knowledge Quarter found in L7 include the £68 million Materials Innovation Factory and the £25 million ‘Accelerator’ life sciences buildings on Liverpool’s Health Campus.
With rental returns on average at 11.52%, L6 is not far behind L7 with the two postcodes dominating the top two spots for buy to let yields in the UK. Once again, L6 is not far from the Royal Liverpool University Hospital, so medical students and employees are selecting this postcode for nearby accommodation. It’s also adjacent to Anfield, a major regeneration zone in L4 Liverpool that has welcomed a £120 million new stand at Anfield Football Stadium and a high-street worth £260 million. There will also be a £10 million training hotel.
Regeneration investments encapsulate Liverpool L6 and create a desirable place to live in just minutes commuting distance to Liverpool city centre. The vibrant sector balances the nearby urban centre lifestyle with the peaceful setting of a 121-acre Newsham Park boasting Victorian Grade II listed buildings for a diverse living experience that has it all.
With the second highest rental return in the UK, housing in L6 is less expensive than the national average and boasts the lowest prices out of the five postcodes in the top 25. The average asking price for a property in L6 is only £108,940 and this combined with the incredible rental returns makes this a hotspot for buy to let property.
Arguably the most recognised Liverpool postcode and home to the Liverpool Anglican Cathedral, L1 is up there with the best rental yields in the UK claiming the number seven spot. Comprising of the most central zones in Liverpool, it’s rare for such a core city district to provide such high rental yields of 9.36%.
Ropewalks and the Baltic Triangle are amongst the areas in the L1 postcode which feature some of Liverpool’s most impressive buy to let opportunities. A bohemian Bold Street was one of the recipients of the £1.5 million cash infusion dedicated to RopeWalks’ streets whereas the Baltic Triangle had a huge £128 million in investment. Chinatown is another area of interest which supports Liverpool’s high intake of Asian students with total regeneration totalling £200 million.
With more tenants than ever wanting to live right in the thick of an urban lifestyle, developments such as the £960 million Liverpool ONE shopping centre provide residents with retail shops, bars, restaurants and unique leisure facilities to deliver an ultimate residential experience. Liverpool ONE regeneration has encouraged more developmentacross the centre with major train stations Lime Street and Liverpool Central which are also located in L1 Liverpool boasting recently enhanced rail links across the city.
At number 20, L3 is a postcode spanning the waterfront, the Central Library, Metropolitan Cathedral, World Museum, Liverpool universities and at its heart, the £1 billion Knowledge Quarter – an innovative district next to the city centre. A 120,000 square foot Liverpool Science Park and a technology hub at Sensor City are just some of the specialist buildings based in the dynamic city region. Another key area within Liverpool L3 is the Fabric District in Islington which is undergoing its own renaissance. Conversion of the rag trade town into a mixed-use area for residential, commercial and student property, the previously run-down locale is receiving a much-needed makeover with a focus on the arts and fashion.
On the waterfront, the Liverpool Waters regeneration scheme worth £5.6 billion is another factor helping to bump up rental yields to 7.38% in this postcode. With average returns of 7.38%, this far exceeds the average yield of around 6.2% in Liverpool, and it’s no surprise given the fact that one of the largest regeneration projects in history graces its postcode. Returns are only going to increase in L6, as the Liverpool Waters masterplan unfolds and it becomes an established part of Liverpool’s docklands amongst other famous wharfs like the Albert Dock.
Another very central neighbourhood ranking highly for rental yields at 7.34% is Liverpool L2. In 21st position, it still sits comfortably in the top 25 buy to let localities in Britain and makes up the fifth member of the city to steal the best seats on the table. The average asking price on property is also only £136,271 – a sharp contrast to the likes of NE1 in the North East where prices on property are £174,248 on average but rental returns are only 7.19.
Making up one half of the main city centre with L1, the L2 postcode is a busy hive for business and leisure. Liverpool James Street station and Moorfields station are situated within this quarter providing expert transport networks across the city whilst the postcode also acts as the core of Liverpool’s Commercial District where an abundance of businesses provide jobs to Liverpool workers. It received a £1.6 million injection in 2015/16 and proved to be landmark for Liverpool city centre regeneration.
However, it’s not all work and no play in L2 Liverpool which is home to the celebrated Cavern Club, deemed the birthplace of the Beatles, plus multi-storey hotels, rooftop bars and five-star restaurants which claim stunning views over to the River Mersey.
A Poor Performance for London
With Liverpool in the driving seat for rental returns in the UK, where does London property investment sits within Totally Money’s recent analysis? It seems that investors are still finding it hard to make a profit on the high property prices and low rental yields present in the capital. Following the trends of 2017, 2018’s figures highlight London as an area to avoid when it comes to property investment.
In fact, the bottom 10 postcodes were in North London with N6 only producing a yield of a minuscule 1.5%. Furthermore, even the best performing London postcodes can’t compete with Liverpool’s competitive returns. For example, E6 properties assure an average yield of 4.81% which is well below the minimum returns of 7.34% which can be achieved and more than half the yield which is available in Liverpool L7.
Property prices are notably much more expensive with Totally Money’s featured London postcodes ranging from around £300,000 to over £2 million. Thenational average property price is £297,587, meaning that London’s average of around £600,000 is overbudget in comparison to more affordable opportunities on the market. It leads investors to wonder why they would invest in such a costly investment when returns are failing to reflect positive trends.
It’s not good news for capital appreciation either as London reports limited property price growth after past years of inflation. In a new-wave of property investment, the North has overtaken the South in terms of price rises to offer a greater potential for capital gain in Northern Powerhouse cities just like Liverpool, where winning yields deliver the best rental incomes and increases in value provide profitable exit strategies for the future.