Why invest in Liverpool?
Liverpool is being touted as the next big property hot spot, and the city is becoming a prime target for property developers (Financial Times, 2016). The city has a below national average house price, the average house costs £156,800 (Echo, 2017) whereas the UK national average house price is £218,255 (Land Registry, 2017). That said, the house prices are growing at a rate faster then London, recording a 7.1% increase in 2016 (Hometrack, 2016).
Liverpool is second only to Manchester in rental yields in the UK, with an average yield of 5.16%. Liverpool’s L1 postcode is particularly on the up, seeing a 41.2% rise in house prices, the overall cost of property is still very affordable; a fitting testament of the property pricing in the city. (Property 118, 2016)
Not only are the house prices incredibly competitive, the urban regeneration of the city is another variable attracting the interest of property moguls looking for the next big city to boom. Liverpool has an inward investment focus, with one of the main examples of this coming in the form of £5.5 billion rejuvenation project; Liverpool Waters. The historic dockland will be developed into a commercial and residential focal point of its vibrant city (ClickLiverpool, 2017)
The city has numerous development plans in place, with developers setting their sights to further grow the once capital of culture. Elliot Group are in the very early stage of a 39-storey development, comprised of a triple-sky scraper; the proposal would be the largest residential development in Liverpool – housing 63 three-bed apartments, 457 two-beds 163 one-beds and 232 studios (Echo, 2016).
Signature Living, the company behind our very own Daniel House, plans to develop what has been described as ‘the ugliest building on Old Hall Street’ – 60 Old Hall Street. The refurbishment will see the currently derelict property become a mix of residential, offices and commercials with plans to add a rooftop gym and running track (Liverpool Echo, 2016).
With mass delays due to unexploded WW2 bombs being found near the site, the Leeds Street North Point development is underway and when complete is expected to house 366 residential units (Liverpool Echo, 2016).
Based on the 2011 Census, when looking at the population, you can break it down to roughly 206,500 homes in Liverpool, which works out close to 2 people per household, to us this paints a picture of a young population. This backed up by 30.7% of the Liverpool population being under the age of 25, that’s 157,900 out of 466,415 people. The population stats point to a city ready to undergo major growth, a city with just under a third of its entire head count under 25, will most certainly continue to grow, educate and lead (Liverpool City Council).
Liverpool is a very popular choice with students, with approximately 50,000 currently residing in the city (60% needing accommodation (Property Reporter, 2016), not only does this paint a promising picture for the future, it has also meant a large influx in student property developments. Student developments can be great investments due to the prospect of immediate income, zero development risk and recorded net assurances of 8% (Property118, 2016).
Statistics recorded in 2014 showed the city region of Liverpool having 591,900 employed residents, with Liverpool itself home to 230,800. You’re then able to break this down into public and private sector, with the public sector employing 55,700 people and the private 175,100, the employment rate of the city between April ’15-March ’16 was 60.8% (Liverpool City Council, 2016).
Daniel House brings a new concept in residential property development. The development is over 100,000 square feet of accommodation and exclusive leisure facilities spread over 14 floors. The building has undergone a huge transformation, and now holds 159 1,2,3 and 4 bed apartments aimed at housing individuals to small groups of students. The leisure facilities set the development apart from alternative investments, with a roof top bar, gym, rooftop garden with a restaurant and bar area; this is grade A living.
All of this is within 10 minutes of Liverpool’s city centre in the heart of South Sefton business district, and immediately next door to the Hugh Baird College; the college has an exclusive contract with the development and will refer all its full-board and overseas students to Daniel House. It’s only 5-minutes to Bootle Oriel Road train station and 30-minutes to Liverpool John Lennon International Airport.
The investment has contracted developer rental income, a net return of 7.5% for 3 years, with additional 3% stamp duty covered in full by the developer, who will also manage all rental income for the first 3 years; the developer holds the right to a resale option.
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