A quick look at the stats shows that Liverpool is one of the UK’s most affordable top-tier cities for property investors. The upshot? Yields exceeding 6.5% on average – but only in certain postcodes. Let’s take a look at Liverpool’s property market, as well as projected regional investment and demographics, to see whether you should look at Liverpool for your next investment.
Liverpool is home to a relatively inexpensive but resilient housing market. The average property price is £197k, and the median price is £160k, with property prices increasing by 2% (£3,500) in the previous 12 months (January-December 2022). Global commercial property firm JLL expects house prices in Liverpool to increase by 21.1% between 2022 and 2026, keeping pace with the national forecast of 21.7% over the same period.
These prices make Liverpool the 27th cheapest city in England & Wales, out of 113. This makes the city a strong option for investors seeking long-term capital growth. But it’s worth noting that new build properties in Liverpool hit an average price of £252,000 last year – far exceeding the £197,000 average. This is in part due to the dominance of previously-owned terraced houses in the city.
Liverpool’s thriving student population, strong regional investment, and growing community of young, skilled professionals helps it deliver higher-than-average yields. In many postcodes, these approach 6%, and in L4 they even hit 6.6%.
Meanwhile, Zoopla found that the city’s average rents increased by 9% in the year to July 2022, just shy of the 11% national average. It’s worth noting that growth is expected to slow in Liverpool in 2022 – with JLL projecting rental growth of around 3.5% in the city. This puts it just behind the expected national rise of 4%.
Liverpool’s population, currently sitting at about 486,000 people, has steadily increased since 2002. It jumped by about 4.2% between 2011 and 2021 (roughly 20,000 people), largely due to a steady stream of students and young professionals.
According to the 2021 census, Liverpool’s median age is 35 – hinting at Liverpool’s large population of younger skilled professionals. Additionally, Liverpool has a lower average age than the rest of England & Wales. This creates a favourable landscape for buy-to-let investors, with a younger demographic more likely to rent than buy.
Liverpool’s average salary is lower than the UK average. The average salary ranges between £32.4k in Knowsley and £34.4k in Liverpool. The UK average was £38.1k in 2021. This paints a slightly
less lucrative picture for recent graduates and skilled professionals, who may choose to live elsewhere in line with higher salary expectations. What’s more, at 5.6%, Liverpool’s unemployment rate is higher than the national average (4.1%).
Liverpool’s crime stats are among the most alarming in the UK. From August 2021-July 2022, most crimes committed in Liverpool (48.1k) were violent crimes. This places violent crime in Liverpool at 1.5x the national crime rate. Theft was the fastest growing crime, increasing by 140.8% over the previous twelve months. Additionally, drugs crime is the highest ranking crime category when compared with the national average. At 3.5x the national crime rate, Liverpool ranks first out of 94 areas in England & Wales for the number of crimes committed in this category.
Liverpool remains a promising and dynamic area for regional investment, with many companies from key sectors establishing themselves in the city. And, with considerable regional investment, this looks set to continue.
The city is increasingly building itself into a hub for Industry 4.0 initiatives – it has, for example, the world’s highest concentration of robotics for materials science. Consumer products giant Unilever has committed to a new R&D facility in the city, at Liverpool Science Park, while there’s also been a £1bn investment in Liverpool’s port and logistics infrastructure, to facilitate a fast, efficient global supply chain.
Outside of manufacturing and technology, the city is also a leader in professional and financial services – in fact, over 41,000 people work in these sectors in Liverpool. This sector makes up 15% of Liverpool’s Gross Value Added (GVA), and the city has even become the largest Wealth Management hub in the UK outside of London. Meanwhile, many legal firms continue to call the city home – including major firms like Hill Dickinson, DWF, Brabners, Weightmans, and DLA.
Liverpool is also spearheading the fight against climate change with its Net Zero Carbon plan for 2030, which will continue to drive investment into the city.
While 2022 predictions from EY indicated that the city would see GVA grow by 2.8% annually up to 2025, these projections seem to have been hit by wider economic turbulence in the UK. As such, GVA growth for 2023 looks set to be about 0.6% – comparing favourably with Manchester (just 0.1%). This growth will see 5,800 new jobs created in Liverpool, taking the overall value of its economy to £14.4bn.
With reasonable prices (especially for pre-owned properties), a young population, and a growing reputation as a hub for high-value services, Liverpool promises to deliver strong investment opportunities in the long-term. But, with considerable variation between postcodes, where in Liverpool should you be searching? Book your free, no-obligation consultation to find out.