When George Osborne laid down his vision for the Northern Powerhouse in 2014, he may not have imagined how quickly the region’s buy to let market would attract investors. Both Liverpool and Manchester have featured prominently in recent private rental sector (PRS) analysis, with Liverpool enjoying a strong and resurgent 2017. As we reported in June, the city was named as the UK’s best city for buy to let yields by mortgage broker Private Finance, while in a report by Totallymoney.com, four Liverpool postcodes topped a UK list for buy to let yields. The analysis, based on 2017 data from Zoopla, found that L7, L6, L15, and L1 respectively offer investors the best value. Fourth in the list, L1 emerged as the nation’s leading city centre postcode for buy to ley yields.
Regarded by many as the cultural capital of the north, Liverpool’s renaissance is typified by Bold Street’s bohemian shops and restaurants, while Liverpool ONE rivals any retail complex in the UK. Historic areas, such as Ropewalks – which includes Bold Street – retain the city’s historic charm and capture a newfound business confidence. Investment from multinationals, such as Deutsche Bank and Jaguar Land Rover, along with a burgeoning digital and technology scene, are driving the city’s economy forward. Residential city centre property is in high demand. Ropemaker Place in Ropewalks exemplifies a new generation of high-quality developments tailored to the city’s young professionals.
Low entry prices and high yields in northern cities, underpinned by a graduate population who are choosing to stay put rather than flock to London, are creating extremely attractive conditions for buy to let investors. Liverpool has some 54,000 students, the figure is even higher in Manchester and both have become great places to live and work, thanks to sustained investment.
Progress in the Northern Powerhouse
With HS2 set to halve journey times between Manchester and London, and the possibility of HS3 connecting Liverpool to Hull, Osborne’s vision of an inter-connected region with the strength to “take on the world” is starting to take shape. Heavy investment in Liverpool’s port and waterfront by the Peel Group will reinstate the city as the UK’s Atlantic gateway. Manchester’s media scene continues to rival London for national importance; MediaCityUK and the tech cluster around Salford Quays is one of the key factors behind a red-hot buy to let market in the area. According to research by home.co.uk, Salford has average rental yields of 5.4% but a ‘real yield’ (rental yield plus capital appreciation) of 32.3%. Employment across the Northern Powerhouse is currently at a record high of 73.8%, and with meetings taking place between Chancellor Philip Hammond and the region’s Metro Mayors, further measures to boost productivity are expected. Analysts and investors will be watching closely.
Peel Port’s Liverpool2 container terminal will also add value to the suburbs of North Liverpool. Crosby especially is perfect for professionals working at the port or commuting to the city centre. With its coastal setting, great golf courses, watersports marina, and acclaimed restaurants, Crosby has become a firm favourite with sports stars and celebrities. The town is very much part of a regional success story. Both Liverpool and Manchester have strong local economies, with demand for property outstripping supply. It’s why the buy to let markets across the two cities offer such fertile ground to property investors right now.
Over 1,500 new jobs could be created in a massive new development at King’s Dock in Liverpool. The new commercial, leisure and retail destination will bring an ice rink and bowling alley to the Liverpool waterfront, along with hotel and residential apartments. With hundreds of jobs being created in the construction stages, the project would “mark the biggest single jobs boost for Liverpool city region since the opening of Liverpool ONE in 2008”. The Contact Company plan to open a new call centre at the site, employing 1,500 people, in addition to the 1,200 currently working at its Wirral centre.
Liverpool Mayor Joe Anderson said: “This is brilliant news for Liverpool and could ultimately lead to the creation of a new riverside destination, boosting our visitor economy and creating jobs for local people.”