22 Dec

What does 2016 have in store for the Liverpool Property Market?

2015-12-22 15.41.10

What does 2016 have in store for the Liverpool Property Market?

Liverpool house prices up or Liverpool house prices down? … and if so, by how much? Those of you who read the Liverpool Property Blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion – so here are my thoughts for the 120,531 Liverpool homeowners and landlords.

The average Liverpool property is 2.8% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (ie consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers as property affordability continues to decrease (although I was reading in The Times the other day that wage inflation (ie salary growth) is showing signs of weakening).

Some commentators have said the higher stamp duty taxes announced a few weeks ago in the Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Liverpool landlords in my blog, but I believe the real issue in the Liverpool property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election (back in May) of 200,000 new homes a year.  All I can say is .. good luck George hitting those numbers!

Why? Because houses take years to build .. not months .. so George and his fabled house building aside …. where does that leave us in Liverpool in 2016?

Well, talking of supply … whilst Mr Osborne builds his properties (and let’s be honest – a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in November 2011, 12,877 properties were for sale in Liverpool .. today that figure is 8,855. On the face of it, this means there is less choice for Liverpool buyers – but it also means with a restricted supply of properties for sale .. it keeps property prices high for Liverpool house sellers.

Everything isn’t all doom and gloom though … again back in November 2011, the average property in Liverpool took 164 days to find a buyer .. latest figures state this has dropped to 131 days .. a drop of 20% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Liverpool is the 3 bed, which takes 119 days to find a buyer (on average) compared to the 2 bed, which takes 136 days. It just goes to show, even though the average has dropped since 2011, how varied that change has been!

So, back to the question everyone is asking …. What will happen to property values in Liverpool in 2016?  I am going to suggest they will rise between 1.5% and 2.5% … nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015! For more thoughts, opinions and views on the Liverpool property market .. visit www.liverpoolpropertyblog.com

21 Dec

Will the young people of Liverpool ever own their own home?

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Will the young people of Liverpool ever own their own home?

I had the most interesting chat with a mature couple (in their early/mid 50’s) from Childwall the other day, whilst viewing one of our rental properties. The property wasn’t for them, but their son, who wanted a second viewing with his parents to get the parental blessing. Now I know that isn’t the norm, but in this case the parents were going to act as guarantor. We got chatting about the Liverpool property market and how they had bought their first property in the city just after they got married in the late 1980’s when they were in their early/mid 20’s. Anyway, we got chatting about how the youngsters of the UK seem to rent more than buy nowadays and from that the conversation covered a number of similar topics. I want to share the highlights of that conversation with you today.

Their son, like many 20 to 30 year olds in Liverpool, desperately wants to own his own property and the parents said he had read in the Telegraph recently, when you compare house prices to earnings, the current 20 to 30 something’s generation have to spend more of their salary in mortgage payments than any previous generation. The demand for private rental sector accommodation in Liverpool is huge. There are in fact 51,361 private rental properties in Liverpool at the last count, impressive when you consider there are 13,524 council houses in the city. However, let us not forget 120,531 properties are owner occupied (66,214 with a mortgage).

Let us all be honest, private renting doesn’t have the stigma it had a few decades ago and it might surprise people that even though us Brit’s class ourselves as a nation of homeowners, roll the clock back 100 years and over 75% of people rented their own home (and it was all from private landlords as council housing only started to come in with the ‘homes for hero’s’ after the first World War). It might also surprise you to learn that at the time of the 1971 census, still more people rented than owned their own home.

Looking at the affordability issue, I have proved time and time again, it is in fact cheaper to buy a property than rent, when one looks at starter homes for first time buyers. 95% mortgages have been available to first time buyers for over four years and whilst you could certainly find better properties in better condition in better areas, terraced houses can be bought for as little as the mid to late £40,000’s in area of Liverpool north of Sefton Park (meaning a modest deposit of £2,500 would be required).

When it came to affordability, I was able to tell them that when they bought their first house in Liverpool in 1988, the ratio of house prices to salary was 3.43 to 1 in Liverpool … and here was the surprise for both of us, today’s ratio is still only 4.35 to 1!

I said I believed there had been a cultural attitude change towards renting property in Britain and that this quiet revolution was likely to be permanent. In the 60’s, 70’s and 80’s, saving for the deposit was everything and buying a house was everything. Youngsters today have far much more disposal income today than people had in the Callaghan and Thatcher years, but choose to spend it upgrading their mobile phones every 12 months, the newest tablet or PC, a newest 50” plasma LCD TV and two sun drenched holidays a year, than go without and save for a deposit.

Yes, there are horror stories of tenants living in rat infested properties with landlords who charge massive rents and don’t repair their properties. But that is very much the exception as most tenants rent homes of a quality they couldn’t ever to afford to buy. Twenty years ago, if you said you rented a property, you were considered the lowest of the low … but now it’s the norm.

So with mortgage affordability being well within the bounds of most first time buyers, the level of deposit required for a 95% being surprisingly modest (starting off at c.£2,500 in Liverpool as mentioned above) until we change our attitudes, the UK housing market is slowly but surely turning into a more European model, where people rent for long periods of their life, then eventually inherit their parents properties and subsequently become homeowners themselves, albeit later in life.

Hence, I cannot see the demand for decent, high quality rental properties ever dropping in the next 10 to 20 years, but only ever increasing as the population continues to soar. Just make sure you by the right property, at the price, in the right location. One source of information on such matters would be the Liverpool Property Blog … www.liverpoolpropertyblog.com

18 Dec

How about this for an investment, the new Shankly Hotel in Liverpool City Centre

Shankly Hotel

Signature are offering their final plots for sale in The Shankly Hotel in readiness for completion in June 2016. The hotel had so much demand, the developer has decided to convert the second floor from offices to hotel rooms.

We all know Liverpool is renowned for its history. This hotel is almost a tribute to LFC legend, Bill Shankly with a museum housing iconic memorabilia. Liverpool attracts around 75 million tourists each year and a huge proportion of these are football fans from all over the world. The hotel is no gimmick, the developer actually worked closely with Mr. Shankly’s family to make it an authentic experience for guests.

If you have kept an eye on Rightmove and Zoopla in the last year you will have noticed the increasing number of new build properties with multiple agents offering guaranteed rental income and hassle free, hands off investments- but you won’t see this opportunity advertised on property portals. So what’s different about this opportunity?

To put it simply, there’s nothing else like it.

One of the main advantages this has over other investments is that it’s already proven. Not just a reputable builder but a successful business. Signature have multiple hotels and serviced apartments in Liverpool with an average occupancy rate of 85% which is fantastic compared to the local average of 72%.

The Investment –

They’ve kept it simple, prices are based on square footage and start from £83,317. They’re offering excellent rental guarantees which increase with time, demonstrating their confidence that the hotel will grow from strength to strength.

Yields for years 1-3            8.5%

Yield for year 4                    9.5%

Yield for year 5                  10.5%

The process is simple:

Step 1: Choose plot and pay reservation fee

Step 2: Instruct solicitors

Step 3: Exchange contracts within 28 days and pay 50% deposit

Step 4: Completion June 2016. Further 50% – reservation fee payable

Very impressive yields I must say. So what if you want to sell?

Between years 3 and 10 there is a buy back option- Signature will buy the plot back for your purchase price plus 10%. Where else can guarantee you 10% appreciation in value?

There is a lot of exciting things happening in Liverpool and now seems to be the time to get involved!

If you would like further information, photos, prices or to view these rooms, then contact myself or Lori Williams on 0151 231 1613 (option 1)

 

17 Dec

The Reach, Leeds Street, Liverpool, L3 – 1 Bed Apt £85,000!!!

The Reach

Here is a new property on the market at a fantastic price.

It’s a one bedroom spacious apartment located in the popular development that is the Reach. All apartments in this development tend to be generous in size compared with some apartments but this apartment looks even bigger.

Click here to view the apartment

As you can see, it’s in a good condition and can easily be rented out for up to £625 pcm with furniture. This gives this a gross yield of 8.8% and with the service charge being £92.52 pcm, then this would bring the yield down to 7.5%.

Even in this depressed market, the price of £85,000 is very appealing as they were originally sold for over £120,000 and some one bedrooms have recently been sold for over £100,000.

I think this property is defiantly worth a viewing!!!