Liverpool holds a well-earned reputation for being one of the most diverse cities in the UK today, with a broad selection of people, attractions, sights, sports, and shopping opportunities.
Liverpool: A City Guide for Buy-to-Let Investors
Liverpool is continually ranked as one of the most lucrative markets in the northwest for buy-to-let property investors. The city has undergone significant regeneration over the past few years, with the development of the prestigious Liverpool One shopping centre, upgrades to the main train station, and ongoing work across the Knowledge Quarter; a world-leading innovation district.
The combination of these projects, alongside Liverpool’s friendly atmosphere, means that the city is on track to surpass every other area within the wider northwest region in terms of economic growth.
An Introduction to Liverpool
Liverpool holds a well-earned reputation for being one of the most diverse cities in the UK today, with a broad selection of people, attractions, sights, sports, and shopping opportunities. From the trendy eats of the Baltic Triangle to the world renowned exhibits at the Tate Modern, not to mention Liverpool Football Club and the Beatles, it’s not surprising that more and more people are flocking to the city. This makes Liverpool an intriguing prospect for buy-to-let property investors keen to add diversity to their portfolio.
As the fifth largest metropolitan area in the UK, Liverpool is an expansive city with a wide range of property types available, from student flats in the city centre to larger family homes in the leafy suburbs. Average rental yields can vary from 2.7% in the outskirts, to 5.6% in the highly sought after L1 postcode, and up to 7.4% in the Anfield and Walton areas, which were historically part of Lancashire, rather than Merseyside.
"Liverpool is forecast to see both the highest sales price and rental growth of any UK city over the next five years"
Why Invest in Liverpool
With property prices rising, a growing number of buy-to-let investors are turning to the northwest to grow their portfolios, and Liverpool is emerging as the natural choice. Why? Here are some of the biggest reasons why Liverpool comes out on top:
Liverpool contributes more than £32 billion to the UK economy, partly driven by the significant number of highly prolific corporations that are headquartered in and around the city. Organisations including B&M Retail, Princes, Yodel Delivery Networks, Home Bargains, Jacob’s Bakery, and Very are all based in Liverpool, while others including Unliver and Typhoo Tea are headquartered in the wider Liverpool City Region, which includes Halton, Knowsley, Sefton, St Helens, and the Wirral.
The number of businesses in Liverpool is continually growing, and even during the height of the global health crisis in 2020, the Liverpool City Region saw more than 14,000 new businesses being registered. The strong business landscape here explains why the Liverpool employment rate, at 74.3%, is remarkably close to the UK average.
As Liverpool’s business ecosystem continues to thrive, projected annual GVA over the next 12 months is expected to grow by 0.6%; a higher percentage than is expected for other locations across the northwest. This figure alone highlights Liverpool’s unique potential.
In the 10 years between 2011 – 2021, Liverpool’s population increased by nearly 20,000, bringing the city population to around 500,000, and the population of the wider Liverpool City Region to over 800,000. This growth has been largely attributed to the rising number of job opportunities in the city, affordable housing, a lower cost of living compared to other UK areas, the rich culture, and friendly atmosphere.
Students account for around 70,000 of Liverpool’s residents. Young people move to the city from all over the UK – and from across the globe – to benefit from Liverpool’s high quality education offerings. The city boasts not one but three major universities: the University of Liverpool, Liverpool Hope University, and Liverpool John Moores University, all of which have campuses in the heart of the Liverpool city centre.
While many students opt to live in the centre, a notable spread has been taking place, with students now expanding into areas such as Wavertree, Kensington, and Sefton Park. These up-and-coming areas are becoming increasingly popular with students, especially as more and more young businesses move into these locations.
Connected Living & Tourism
Liverpool is a well-connected city, with easy access not only to other destinations within the UK, but internationally, too. Getting to London from Liverpool is already quick and simple, with the direct Liverpool Lime Street – London Euston train taking less than 2.5 hours. However, this is anticipated to drop to just 90 minutes following the completion of the HS2 line, which will connect the north and south.
Liverpool is also served by the Liverpool John Lennon Airport, located just outside the city centre. Today, the airport welcomes more than 5 million passengers per year, but that is expected to increase to almost 12 million per year under plans to expand the terminal and extend the runway, allowing Liverpool to offer more global routes. The project, which is due to be completed by 2050, is expected to bring 4000 extra jobs to the Liverpool City Region and contribute £260 million more to the GVA.
Liverpool’s excellent connections mean that tourism plays a big role in the local economy. With more than 67 million visitors every year, the Liverpool visitor economy is worth nearly £5 billion, and has created more than 57,000 jobs across the region.
With the Tate Liverpool, the Walker Art Gallery, and the UNESCO-listed Royal Albert Dock, Liverpool has long been a desirable destination for holidaymakers from all over the world. Some come to see the home of the Beatles, visiting the Cavern Club, Strawberry Fields, and the statue standing at the Pier Head. Some come to see the city’s ‘spare’ cathedral, while others sing along on the ferry ‘cross the Mersey.
Investing in Liverpool buy-to-let property
JLL predicts that property prices in Liverpool will grow by 21% over the next 5 years, while property rental growth is expected to demonstrate a 13.7% increase. These projections stem from the predicted rise in demand for accommodation in Liverpool as the population increases, driven by new job opportunities, greater levels of tourism, and more and more students accepting offers from Liverpool institutions.