Market Report 2019 | Liverpool Property Investment

LIVERPOOL CITY GUIDE MARKET ESSENTIALS 2019

01.

WELCOME TO LIVERPOOL Liverpool is a fascinating, multi-faceted city. The name

GLASGOW

EDINBURGH

brings to mind musical brilliance, sporting prowess NEWCASTLE

and a rich maritime history. More recently, it has come

LEEDS

to be associated with exciting architectural projects, superb cultural attractions and exhibitions, leading

MANCHESTER

LIVERPOOL

fashion brands, entrepreneurial activity and a rush to embrace contemporary city life. This outstanding offering led to TripAdvisor highlighting Liverpool as one of the best places in the world to visit in 2018.

BIRMINGHAM CARDIFF BRISTOL

LONDON

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“Liverpool people are famous for liking clothes and fashion; they are very social and lively people…”

nearly 30 years and home to the renowned Liverpool

“More than three-quarters of visitors told us that our Terracotta Warriors exhibition was the main reason for their visit to Liverpool.

We are delighted to have made such a significant contribution to the visitor economy of the Liverpool City Region.”

Biennial arts festival, the city’s creative credentials

Sir David Henshaw, Chairman, National Museums Liverpool

Vivienne Westwood

A decade since Liverpool was crowned European Capital of Culture, the city continues to go from strength to strength. Site of the Tate Liverpool for

are beyond repute. With a year-long programme of events and celebrations in place to mark the tenyear Capital of Culture anniversary, those cultural

As well as its cultural offering, Liverpool has a thriving,

credentials are stronger than ever, particularly given

service-based economy. The Liverpool City Region,

Liverpool’s coup of hosting the Terracotta Warriors

with a population of 1.5 million, recorded a total

exhibition this year, which contributed some £78

GVA of £30.8 billion in 2016. Annual growth in GVA

million to the city’s economy.

rose by 1.6%, to reach a GVA per head of £20,125.

The key contributors to the city’s success are its public administration/education/health, distribution/ transport/accommodation and food, manufacturing and real estate sectors, which account for 23.8%, 19.2%, 13.9% and 13.0% of GVA respectively.

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Liverpool’s status as a leading fashion and retail

With a rapidly growing, youthful population (22-29 year

destination was cemented with the opening of

olds in the city centre increased fourfold in the decade

Liverpool ONE – the UK’s largest open air shopping

to 2011, according to Centre for Cities), Liverpool is a

centre – in 2008. The launch gave the city a significant

melting pot of entrepreneurial talent. Many larger firms

boost, propelling it to become one of the top five most

and funders have recognized this. Santander started

popular UK retail destinations.

its first business incubator in Liverpool, while Launch22

Tourism plays a key role in Liverpool, worth £4.5 billion

opened its first non-London incubator there.

to the economy and encompassing 66 million annual

A growing population and plenty of blossoming talent,

visitors, according to the Liverpool City Region Local

backed by strong economic credentials and a buoyant

Enterprise Partnership. The tourism sector supports

housing market make for an ideal environment for

more than 53,500 jobs across the city.

opportunity, boosting Liverpool up the list of cities to watch most closely in the UK over the coming months and years.

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02.

THE LONG-TERM APPEAL OF LIVERPOOL’S HOUSING MARKET Over the past five years, property values in Liverpool have shot up by 26.24%, according to Zoopla. Meanwhile, the city regularly tops the 20-city House Price Index from Hometrack for its growth rate. The latest figures – for September 2018 – show Liverpool once more leading the country, with an annual property price increase of 6.9%.

AVERAGE CITY HOUSE PRICES IN SEPTEMBER 2018 Liverpool

ANNUAL PROPERTY PRICE GROWTH RATE

£120,500

6.9%

Birmingham

£163,500

6.5%

Manchester

£167,500

6.2% £484,400

London

-0.4%

£217,400

UK

£100k

£200k

£300k

£400k

3.4% £500K

-1%

0%

2%

4%

6%

8%

One of the reasons for Liverpool’s sustained

The 5.5% increase in Liverpool’s population in the

property price growth is the pace at which demand

decade to 2011 marked a turning point not just for

for properties in the city has outstripped supply.

the city itself, but for the UK as a whole. Across the

Liverpool’s population fell steadily from the 1930s until

nation, city living has become more sought after, with

the early 2000s, when a resurgence of city living saw

key urban areas experiencing a sudden yet sustained

it increase from 435,500 in 2001 to 466,400 in 2011,

turnaround in their declining populations after the

according to Census data.

millennium.

The rapid influx of new citizens has had a notable impact on Liverpool’s economy. According to Centre for Cities, Liverpool saw an economic growth factor of 2.1 between 1998 and 2016, putting it ahead of all other majors British cities bar London, Edinburgh and Cardiff.

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The pull of the UK’s cities on young professionals

As Liverpool’s population to continues to increase,

seeking economic opportunities has put pressure

construction needs to pick up the pace in order to

on housing stock. At the same time, homebuilding in

ensure that the city’s housing needs can be met. And

Liverpool is below the level required in order to meet

while supply continues to lag behind demand, prices

demand. The Home Builders Federation puts that

look set to continue rising. Indeed, JLL has projected

number at 3,000 homes per year, but City Residential

house price growth of 19.3% between 2018 and 2022

projects that just 7,820 city centre homes will be

for Liverpool, accompanied by rental growth of 17.6% –

delivered between 2018 and 2021.

both well above the UK average.

“Over 3000 homes need to be built every year across Merseyside to meet projected housing need, a level that has been consistently missed.”

Steve Turner, Home Builders Federation

HOUSING MARKET FORECASTS House Price Growth (%)

2018

2019

2020

2021

2022

TOTAL

Liverpool

4.5%

3%

3.5%

3.5%

3.5%

19.3%

UK

1%

2%

2.5%

3%

3.5%

12.6%

Rental Growth (%)

2018

2019

2020

2021

2022

TOTAL

Liverpool

3.5%

3%

3%

3.5%

3.5%

17.6%

UK

2%

2.5%

2.5%

2.5%

2.5%

12.6%

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03.

YOUNG PROFESSIONALS DRIVE LIVERPOOL RENTAL BOOM The UK is experiencing a sustained decline in owner-occupier levels, with home ownership now standing at 63.4%, according to Eurostat. As ownership levels have dropped, the private rented sector has boomed, doubling in size since 2004. This is particularly true in the country’s cities, with young professionals seeking out city centre accommodation that is close to the best economic opportunities and leisure pursuits available in their area.

Demand has pushed rents up in many areas. In the

young professionals are instead happy to rent more

North West, rents rose by 2.3% in the year to Q3 2018,

luxurious apartments that provide them with on-site

according to the Rightmove Rental Price Tracker. Current

facilities and the convenience of city centre living.

asking rents, based on Zoopla’s data, stood at £839 pcm in Liverpool in November 2018. Apartments commanded significantly higher rents than houses, reflecting shifting

According to Centre for Cities, Liverpool’s city centre population increased by 160% in the decade to the last Census (2011). It was also the fastest growing

tenant requirements over recent years.

city centre in the country between 2002 and 2015,

Modern tenants are looking for contemporary

growing by 181% over that period. According to

properties that place them at the heart of the action.

City Residential, the city centre population has now

With expectations of home ownership in the UK

reached around 42,422 people and is projected to

significantly lower than they used to be,

increase to 50,000 by 2020.

CURRENT ASKING RENTS IN LIVERPOOL £1,600

£1,463

£ Price per calendar month

£1,400 £1,200

£1,056

£1,000

£837

£800

£710

£600 £400

£407

£501

£732

£526

£200 £0 1 Bedroom

2 Bedroom

3 Bedroom

4 bedroom

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While those working in the city centre used to be

This is particularly true in Liverpool, where Centre

happy with renting mediocre accommodation in

for Cities reports that those aged 22-29 and living

the suburbs and commuting to work, with the goal

in the city centre quadrupled in number between

of saving enough for a deposit, a tougher lending

2001 and 2011. Liverpool’s established businesses

environment and the rate at which home values have

have benefitted from the influx of talent, while keen

outstripped salaries have allowed new build, city

young entrepreneurs have built up a dynamic startup

centre rental accommodation to flourish.

scene in the city. The change has also benefited property investors, with buy-to-let apartments in Liverpool now an essential part of the city’s

“Compared to 10 years ago 23.1% of renting households are couples, up from 13.9%, as occupants prefer to rent rather than the outright purchasing of a property with 44% of private tenants not expecting to buy in the long term.”

accommodation offering.

Your Move Magazine

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04.

LIVERPOOL’S INTERNATIONAL APPEAL It’s not just tourists who flock to Liverpool, but investors too. The city is home to a wealth of opportunity for those looking to invest in substantial projects, particularly those related to infrastructure and property.

“Liverpool City Region has recorded a strong economic performance over recent years and these figures clearly underline the progress being made to deliver sustainable economic growth across the city region. This is an attractive location for businesses to invest and they are doing so in significant numbers.”

Asif Hamid, Interim Chair, Liverpool City Region Local Enterprise Partnership

IBM has most recently flagged Liverpool, as part of the

Investors seek safe, stable environments in which to

Liverpool-Manchester metropolitan area, as one of

grow their money, and Liverpool ticks all the boxes

the world’s top ten cities for foreign direct investment

when it comes to what they are looking for.

(FDI). The 2017 Global Location Trends report placed the city tenth in its ranking, highlighting the creation of some 7,000 jobs as a result of FDI over the course of the year.

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“The levels of investment in our city continue to top £1 billion per annum. Since I came into office in 2012, we have seen over £4 billion invested in new houses, roads, offices and hotels. Despite wider economic uncertainties the fact is, confidence in Liverpool is booming. There are currently over 270 major new projects planned, with £14 billion worth of schemes in the pipeline. Indeed, the work we are doing with partners to develop the new £1 billion Paddington Village in the Knowledge Quarter and the Ten Streets Creative District will redefine Liverpool’s economy over the next 30 years.” Joe Anderson OBE, Mayor of Liverpool

FTE equivalent job spaces have been created across

“Liverpool is enjoying a renaissance, powered by the digital tech companies that operate within the city… Meanwhile, the Government’s commitment to a £556 million boost for the Northern Powerhouse can only mean positive progression for the digital tech sector, while the city exercises new powers through devolution.”

the city since January 2017.

Tech Nation 2017

Looking to the future, the construction value of major

With country-leading economic growth, and a status

schemes currently in progress totals £1.4 billion.

as one of the most exciting cities in the world for

Those developments are projected to create a further

FDI, Liverpool’s appeal as an investment destination

2,680 new/safeguarded FTE job spaces, according to

offers solid credentials for the years ahead.

Liverpool is home to 294,200 businesses. With six million people within an hour’s drive of the city, including more than 90,000 students, it has an extensive local talent pool. At the same time, it is the most cost effective city region in the UK, based on its size, scale and amenities, according to the Liverpool City Region Local Enterprise Partnership.

Major schemes completed in Liverpool since January 2012 have a total value of £4.6 billion, while major schemes completed since January 2017 total £527 million. In addition, some 2,080 new/safeguarded

the Liverpool Development Update 2017.

Liverpool’s digital and technology scene has played a key role in the city’s economic prowess in recent years. Tech Nation 2017 reported a total of 194 startup births there, alongside 23,407 digital jobs and a total digital GVA of £359 million.

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05.

FUTURE PLANS There’s plenty in Liverpool’s future for the city’s residents – and investors – to be excited about. The Liverpool City Region metro mayor was elected in May 2017, with key devolutionary powers giving the city greater flexibility to grow and shape its economy in response to local talent and opportunity.

Over the next 30 years, the metro mayor will have a

to offer world-class facilities to its residents as

budget of £900 million at his or her disposal, with the

its population expands. In 2017, the British Music

powers of the office covering transport, health and social

Experience Museum opened in the Cunard Building,

care, education and skills, and planning and housing.

the Royal Court Theatre refurbishment work continued and a range of major undertakings in the Ropewalks

Liverpool is already home to an ambitious

area of the city were completed.

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Kingsway Tunnel

As well as Ropewalks, Liverpool’s Chinatown, trendy Baltic Triangle and Ten Streets areas are undergoing significant regeneration, with student schemes and residential buildings blending with commercial space and new public areas.

The SuperPort Action Plan 2011-2020 covers £1.8 billion of new infrastructure developments, building on the city’s rich maritime history. Liverpool City Region has projected that the works will add £18.3 billion of additional GVA by 2030, with up to 30,000 new jobs created.

“Retailers and manufacturers are increasingly seeking port centric locations close to large centres of population to base value-adding activities and distribution, reducing freight costs and duplication in the handling of goods and reducing the time goods take to reach the customer. Liverpool City Region, with its central position in the UK, and situated in the largest economic region in the UK outside of London, is an ideal location to take advantage of these trends, offering a cost-efficient, low carbon SuperPort delivering compelling, competitive advantages for business.”

Adam Challis, Head of Residential Research, Jones Lang LaSalle

Liverpool’s former International Festival Gardens forms

million spent on them, leading to 200,000 visitors

another part of the city’s far-reaching Liverpool 2020

enjoying the 63 acres of tranquil green space since 2012.

Vision, with a ‘cultural garden suburb’ due for creation

Additional development looks set to transform the site

in the stunning waterfront location. The gardens have

by 2020, bolstering the existing lake, woodland walks and

already undergone substantial renovation, with £3.7

calming Japanese and Chinese gardens.

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WITH A £15 BILLION PLAN ALSO IN PLACE TO ENHANCE ROAD AND RAIL CONNECTIONS IN THE LIVERPOOL REGION, THE CITY IS PERFECTLY POSITIONED IN TERMS OF ITS FUTURE POTENTIAL, WITH RESIDENTS AND INVESTORS ALIKE BENEFITTING FROM ITS DYNAMIC, FORWARD-THINKING APPROACH TO CONTEMPORARY URBAN PLANNING.

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Riverbank House Putney One Bridge Approach Fulham London SW6 3JD London Office: 0203 3726 499 info@surrendeninvest.com www.surrendeninvest.com

We make no representation or warranty of any kind with regard to the information contained in this brochure and none of the information shall be treated as financial advice. The information is not an invitation to invest and you must rely entirely on your own investigations and due diligence before making the decision to invest. Any opinions expressed in this document are not statement of facts.