LIVERPOOL PROPERTY GUIDE 2017/2018
LIVERPOOL PROPERTY GUIDE - 2017/18
THE CONTINUING STRENGTH OF BUY-TO-LET The strength of the UK buy-to-let market is not a secret anymore. The number of rented households in the UK currently exceeds 5.7 million, and this figure is expected to grow to more than 7.2 million as soon as 2025. The total value of the buy-to-let sector now exceeds £1.29tr and this will only continue to increase in the coming years. As house prices continue to rise – 5% over the last year according to the Office for National Statistics (ONS) in October 2017 – the buy-to-let sector will only become more attractive. Growing house prices make it more difficult for first time buyers to get on the housing ladder, meaning that they continue to rent in the long term. With that in mind, owning property for the purpose of renting it out is likely to continue being a popular and lucrative option in both the short and long term. From the perspective of the investor, ‘bricks and mortar’ has consistently performed well over the last decade, providing high returns with a relatively small risk. In addition, property is also a versatile investment class which
can work to suit different budgets and requirements, as well as suiting a variety of future plans. Buy-to-let provides a two tier investment opportunity which is popular with investors: as well as the potential for future capital appreciation on an investment property, investors can also benefit from regular rental income over the course of their investment. Rental income could also grow over time as the competition for high quality accommodation becomes fiercer. So, why should a buy-tolet investor consider Liverpool? In short, Liverpool enjoys the winning combination of having low entry prices, high rental yields and a booming economy which is set to ensure the city
grows considerably over the coming decades. There has been a fair amount of uncertainty in recent times, with the Brexit process ongoing and some anxiety about the decline of the London market, it might not seem like the most obvious time to invest in property – but it is clear that it is simply a case of choosing the right location. The London market is indeed declining, especially the luxury rental market where entry prices long ago entered the realm of being ludicrous and, consequently, rental yields in the capital are being squeezed to within an inch of their life. According to the ONS, the growth of house prices in London
Predicted Liverpool house price growth in the next 5 years
A quarter of all UK homes will be in the rental sector by 2020
Predicted house price growth in the North West by 2020
(Financial Times, 2017)
Liverpool’s ‘Three Graces’, part of the UNESCO World Heritage Site.
People joining the PRS annually 1,200,000
UK RENTAL DEMAND: Predicted extra demand in the Private Rented Sector (2016-2020) Source: Savills 5 year forecast, FT.com
5 year prediction for PRS growth
1,000,000 800,000 600,000 400,000 200,000
was below the national average for the first nine months of 2017. It is no surprise that investors are fleeing the capital in droves and looking for an alternative – and they are becoming increasingly aware that Northern cities such as Liverpool are the way forward. Compared to the extended slowing of house price growth in London, the fact that Zoopla has recorded growth of more than 22% over the last five years in Liverpool helps to explain the city’s attraction.
Investing in the right location is of paramount importance when looking at a buy-to-let property, and it is clear that Liverpool is one of the best prospects currently available in the UK market. The city has a booming economy, is seeing a huge amount of investment, and a population which is projected to grow to more than 500,000 by 2025. This is the perfect time to invest in Liverpool and start to take advantage of the remarkable growth which has begun.
National house price growth over the last year
House price growth over the last 5 years
(Office for National Statistics, 2017)
LIVERPOOL PROPERTY GUIDE - 2017/18
WHY LIVERPOOL? Liverpool is undergoing a remarkable renaissance. This historic city by the Irish Sea has become one of the UK’s top destinations for both businesses and people, and is home to a nationally significant economy and world famous culture. Liverpool has set a fantastic example to other British cities and the future of Merseyside is extremely bright.
Liverpool sits at the centre of a large city region which encompasses the local authority districts of Halton, Knowsley, Sefton, St Helens and Wirral, in addition to the city itself. It is a diverse region, containing everything from the UNESCO World Heritage Site along Liverpool docks, to rolling countryside further inland, to the world’s second largest concentration of windfarms just offshore.
17.6% Predicted rental growth in Liverpool over the next 5 years (JLL, 2017)
The region as a whole has been the site of a huge amount of investment,
both from the UK and around the world, and Liverpool is the main focus of that. Approximately £10bn worth of development is either already complete or underway in the city, with another £40bn planned over the next few decades. This investment is heavily concentrated on the sort of sectors which will provide long term benefits to the city, the region and the country as a whole – infrastructure, housing and business being the chief beneficiaries. A great example of this is the enormous Liverpool ONE shopping centre. This is a landmark shopping and leisure destination covering 1.5 million sqft which has reoriented the whole city centre closer to the waterfront. Liverpool ONE is the largest open air shopping centre in the UK, and the busiest in the UK outside of London. This £1bn development
has broken retail records quarter by quarter ever since it opened, recording an average annual footfall of over 27.5 million visitors each year.
500,000 Projected population of Liverpool by 2025 (Office for National Statistics, 2017)
Another fantastic example of regeneration in Liverpool is the extensive work being done to the city’s port. A £400m deep-water container ship port called Liverpool2 was completed in November 2016 and is capable of handling most of the biggest ships in the world. Allowing the world’s largest container ships
direct access to Northern markets is to the benefit of Liverpool and the region as a whole, and is made possible by major road and rail upgrades which are smoothing the passage inland to improve efficiency. The development is set to expand further with new state of the art crane systems and storage warehouses which will allow the port to handle two 380 metre long ships simultaneously. This will make it one of Europe’s premier ports and puts Liverpool on the map. Having prospered since being named the 2008 European Capital of Culture, the city hasn’t looked back. The investment of £130m into the regeneration of Albert Dock – the most-visited free tourist attraction outside of London and the centrepiece of Liverpool’s UNESCO World Heritage Site – was just the beginning of Liverpool’s resurgence.
Liverpool has more listed buildings than any UK city outside of London, its selection of galleries and museums is one of the best in the UK and the city centre is being transformed.
North West England
Liverpool is looking to the future with immense confidence, and investors should seriously consider purchasing property in the city sooner rather than later.
1.5m Population of the Liverpool City Region (Liverpool City Region Combined Authority, 2017)
LIVERPOOL PROPERTY GUIDE - 2017/18
A HUB FOR BUSINESS AND CULTURE Liverpool’s economy is thriving, which makes it a compelling location for buy-to-let investors. With acknowledged strengths in sectors including automotive, business services, creative and digital, life sciences, low carbon technologies and ports and logistics, demand for rental properties aimed at professionals is anticipated to remain strong. The city itself is at the centre of a regional population of 1.5 million people who drive a regional economy worth approximately £30bn that engages with local business in order to proactively encourage growth. Liverpool has a young and creative population, with a third of the workforce currently aged 16-19 and a fifth in their 20s, and these are the people who are creating the businesses which are pushing economic growth onwards. It is no surprise that the increase in economic growth in the city coincided with the doubling of the city centre population between 2001 and 2011. Part of the
success of Liverpool’s young, dynamic workforce can be assigned to the city’s universities which produce 30,000 highly trained and skilled graduates a year, of which a large proportion choose to stay in the city. Is it really a surprise that a diverse range of multinational companies – such as Jaguar Land Rover, Maersk, Toyota, Bentley, Fujitsu, Barclaycard and American Airlines among many others – see Liverpool as a perfect place to do business? Liverpool is a popular option for ‘northshoring’, the practice whereby companies move
their business away from London to take advantage of more affordable business conditions. Given that the cost of living on Merseyside is almost 23% lower than living in London, many people are also moving to Liverpool to take advantage of the outstanding opportunities on offer.
39% Increase in business output over the last decade (Invest Liverpool, 2017)
Walker Art Gallery
A further driver for Liverpool’s economic growth lies in its connectivity. Liverpool John Lennon Airport is just under half an hour from the city centre by car and is regarded as one of the UK’s top airports, serving more than five million passengers and over 60 destinations worldwide annually. In addition, hourly train services run to London in just two hours, while a journey to Birmingham takes under an hour and a half.
£29.5bn The Liverpool City Region Economy (Office for National Statistics, 2017)
Culturally, Liverpool has long been a powerhouse. The city is home to a raft of award-winning museums and galleries, as well as live music venues and a diverse food and drink scene, which is constantly evolving and improving. The city also stages a range of festivals and cultural events on a regular basis which draw thousands of people to Liverpool.
UNESCO World Heritage Site
However, for many, Liverpool will always be regarded as a city of football, with both Liverpool Football Club and Everton Football Club drawing massive audiences. Liverpool’s Anfield stadium sees an average attendance in excess of 54,000, while Everton’s neighbouring stadium consistently draws more than 40,000 visitors for each home game, with the club currently planning a new 50,000 capacity stadium near the docks. As a result of the many positive advances and huge investment Liverpool is currently experiencing, more people than ever before are moving to the city to be a part of what is happening. The city’s skyline has evolved beyond recognition in recent years and there will be even greater opportunities available in the future.
39% Recorded increase in output in Liverpool over the last decade (Invest Liverpool, 2017)
LIVERPOOL PROPERTY GUIDE - 2017/18
MODERN EXPERTISE Liverpool was historically known around the world as a shipping and mercantile centre, but the city has reinvented itself and is now home to dozens of modern industries which are pushing it onwards in the 21st century. The regional economy is currently worth almost £30bn, and has been one of the fastest growing areas in the UK in recent years according to the Oﬃce for National Statistics. Some of the sectors in which Liverpool is particularly prominent are as follows.
ADVANCED ENGINEERING Several major car manufacturers call the Liverpool region home. Big names such as Jaguar Land Rover, Toyota and Bentley contribute to the region producing a quarter of a million cars each year. Alongside the significant car production industry, Liverpool is also home to notable regional centres for global technology giants such as Sony and Fujitsu. Liverpool is also home to the sort of green technologies which the country will come to rely on more and more as the fight against climate change continues. The giant wind farms off the coast of Liverpool, including the giant Burbo Bank extension, feature the largest individual turbines in the world and provide power to 4.3 million homes. Liverpool’s example has been actively studied and emulated by green technology companies across the world, cementing its status as an innovator in this field. Liverpool’s advanced manufacturing sector is projected to grow by 22% over the next decade, according to Invest Liverpool. This is compared to an average national projected growth of 19%, and is perhaps a consequence of the fact that advanced manufacturing jobs in Liverpool have an economic output 7% higher than the average.
BUSINESS AND FINANCIAL
CREATIVE AND DIGITAL
Liverpool is one of the UK’s premier business and financial services centres outside of London, and is home to more than 50 large, notable companies which have chosen to locate offices in the city. Private companies such as Marks & Spencer, Barclaycard, Santander, American Airlines and Bosch have a significant presence in the city, with others such as Barclays set to join them in the near future. More than 650 legal firms call Liverpool home, and employ 10,000 people, as well as international wealth management giants like Pershing.
Liverpool is one of the UK’s fastest growing digital and creative cities, alongside London and Manchester. The city centre provides a fantastic environment for creative industries with its 1 Gbps internet connections and world class data centres, as well as offering funding and business help through several Council schemes.
The public sector is also well represented in Liverpool, with HMRC having a big stake in the city, as well as many public sector contractors like Capita and Tata Consultancy Services being located there. In addition to all of that, the city’s retail sector is enormous and employs more than 8,000 people.
MEDICAL AND LIFE SCIENCES When you think of life sciences, you tend to think of Cambridge – but Liverpool is growing fast and is becoming nationally renowned in fields as varied as research and development, clinical trials and biomanufacturing. Merseyside has seen innovations in infection treatment, precision medicine, children’s health, big data and vetinary science, among many others.
The Liverpool Innovation Park, the Baltic Triangle and Cotton Exchange are just three of the areas which are becoming high quality clusters for digital and creative business activity. It is no coincidence that the British Interactive Media Association has its regional HQ in Liverpool, and that smaller cooperative ventures such as Kin and Creative Kitchen have found the city to be such an accommodating home.
Hundreds of medical companies are based in the Liverpool-Manchester corridor, making the region a hotbed of activity. The new £429m Royal Liverpool Hospital only adds to this, as does Knowledge Quarter Liverpool which has already delivered £1bn worth of developments and has another £1bn in the pipeline to create what it calls a “unique mixture of science, medicine and culture”. In addition to all of this, the Royal College of Physicians has recently opened its Northern Centre of Excellence in the city.
LIVERPOOL PROPERTY GUIDE - 2017/18
KNIGHT KNOX Knight Knox is a market-leading property consultancy with a particular focus on city centre residential markets in many of the UK’s outstanding cities. We are the driving force behind every stage of the development, from the initial land acquisition, through the planning and development of the scheme, and onto the eventual sale and ongoing property management. Our presence at every stage of the property lifecycle allows us to design our developments with the occupier in mind from the very beginning. Knight Knox is a unique property consultancy and our outstanding portfolio is second to none.
financing, lettings, property management and sales, we are one of the few companies which is involved at all stages of development.
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Find out more about investing in Liverpool, call Knight Knox on 0161 772 1370 or email email@example.com
With departments which specialise in land acquisition, design, marketing,
Total number of UK projects launched
Number of completed and tenanted developments
Total value of all UK projects launched
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Knight Knox Quay West at MediaCityUK Trafford Wharf Road Manchester M17 1HH United Kingdom +44 (0)161 772 1370 www.knightknox.com This report has been created by Knight Knox using information that is correct at the time of print (October 2017). The report should be used as a guideline only, and should not be used in lieu of financial advice from an IFA or similar qualified financial professional. Knight Knox will not be liable for any financial loss, cost or expense incurred or arising by reason of any person using or relying on information in this publication. 0311 - V1
Liverpool Property Guide 2017/18