LIVERPOOL PROPERTY GUIDE - 2016/17
EMBRACING BUY-TO-LET When it comes to placing the importance of the buy-to-let property sector in context, a few key statistics speak volumes. The number of rented households in Britain is now over 5.7 million – a figure which is expected to reach 7.2 million by 2025. This means that within 20 years, one in four homes in the UK will be rented. The latest figures also value the Private Rented Sector (PRS) at £1.29 trillion, which means that it has now surpassed the value of mortgaged owneroccupied stock for the first time. The buy-to-let property sector is big business in its own right. As house prices continue to rise, and as more people become reliant on the PRS, owning property for the purpose of renting it out will continue to prove a highly popular and lucrative option in both the short and long-term. From an investor’s perspective, ‘bricks and mortar’ has consistently performed well over the past decade. But apart from providing high returns at marginal risk, property is also versatile and can work to suit different budgets, requirements and future plans. Buy-
2
to-let is a popular asset because it is a two-tiered investment strategy: investors generate rental income, which will naturally grow over the years, while benefitting from capital appreciation when the time comes to sell. Over the past decade, the market has experienced rising demand from both well-established residential investors wanting to boost their portfolio and new entrants into the market looking to subsidise their income or looking for an alternative to a traditional pension. So, why should a buy-to-let investor consider Liverpool? In short, Liverpool
is arguably the most affordable major British city, offering investors great value for money and higher yields than other large regional cities. While Britain’s decision to leave the EU has undoubtedly created uncertainty across the entire economy, the prompt and decisive action taken by the Bank of England to cut the base rate has since stabilised and strengthened the housing market, alleviating any fears of a house price crash. In the run up to the EU referendum, JLL data shows that activity in the British housing market was “modestly weaker” as uncertainty
266,000
18%
£1.29 trillion
The projected shortfall of newbuild properties by 2020
Predicted house price growth in the North West by 2020
The current value of the UK’s Private Rented Sector (PRS)
(Shelter)
(JLL)
(Savills)