31 Jan

Shaftesbury Terrace, Old Swan, Liverpool, L13 – 9% Gross Yield

I’ve spotted this new to the market two bedroom mid terrace house located in Old Swan. Old Swan is one of my favourite places to invest due to the reasonable property prices and the excellent demand by tenants.

This two bedroom looks like it may be a repossession but the property looks to be in very good order with the bathroom and kitchen looking to be around 5 years old. I feel this property would be ready for immediate occupation after a small amount of cosmetic work has been done.

2 bedroom mid terrace properties in Old Swan can achieve between £425 and £475 per month. If this property was purchased for £60,000 and rented for £450, then this would generate a gross yield of 9%.

Click Here to view the property advert

I think this seems like a very good purchase but best be quick as I can not see it being on the market for too long.

30 Jan

Ellerman Road, Leeds Street, Liveprool, L3 – 2 Bedroom – £89,950!!! – 8.7% Gross Yield

I’ve come across a property in a development that I like in Liverpool, called The Reach.

The property I have spotted is the lowest priced two bedroom I’ve seen advertised here but on closer inspection, I can see why because it’s a ground floor apartment facing on to the car park and it does not have parking. If you take away these two negatives, then the property is fantastic due to the size of the apartment, finish and layout.

These apartments always prove very popular with tenants and prices are increasing with rents in this development and I feel you would achieve a rental income of £650 per month, giving this city centre apartment a 8.7% gross yield if purchased at the asking price.

Although there will be a service charge, it’s very reasonable due to the size of the development and many other leaseholders contributing towards the cost and this also includes a 24 hour maned concierge.

If you are interested in the property, then take a look here

If you would like to speak to me about this property or anything property related, then contact me on adamr@liverpoolpropertyblog.com

26 Jan

£144m a year black hole in the Liverpool Property Market – Is Buy to Let Immoral? (Part 2)

An Englishman’s Home is His Castle as Maggie Thatcher lauded – everyone should own their own home. In 1971, around 50% of people owned their own home and, as the baby-boomers got better jobs and pay, that proportion of homeowners rose to 69% by 2001. Homeownership was here to stay as many baby boomers assumed it’s very much a cultural thing here in Britain to own your own home.

But on the back of TV programmes like Homes Under the Hammer, these same baby boomers started to jump on the band wagon of Liverpool buy to let properties as an investment. Liverpool first time buyers were in competition with Liverpool landlords to buy these smaller starter homes … pushing house prices up in the 2000’s (as mentioned in Part One) beyond the reach of first time buyers. Alas, it is not as simple as that. Many factors come into play, such as economics, the banks and government policy. But are Liverpool landlords fanning the flames of the Liverpool housing crisis bonfire?

I believe that the landlords of the 51,361 Liverpool rental properties are not exploitive and are in fact, making many positive contributions to Liverpool and the people of Liverpool. Like I have said before, Liverpool (and the rest of the UK) isn’t building enough properties to keep up the demand; with high birth rate, job mobility, growing population and longer life expectancy.

According to the Barker Review, for the UK to standstill and meet current demand, the country needs to be building 8.7 new households each and every year for every 1,000 households already built. Nationally, we are currently running at 5.07 per thousand and in the early part of this decade were running at 4.1 to 4.3 per thousand.

It doesn’t sound a lot of difference, so let us look at what this means for Liverpool …

For Liverpool to meet its obligation on the building of new homes, Liverpool would need to build 2,110 households each year. Yet, we are missing that figure by around 880 households a year.

For the Government to buy the land and build those additional 880 households, it would need to spend £144,895,342 a year in Liverpool alone. Add up all the additional households required over the whole of the UK and the Government would need to spend £23.31bn each year … the Country hasn’t got that sort of money!

With these problems, it is the property developers who are buying the old run-down houses and office blocks which are deemed uninhabitable by the local authority, and turning them into new attractive homes to either be rented privately to Liverpool families or Liverpool people who need council housing because the local authority hasn’t got enough properties to go around.

The bottom line is that, as the population grows, there aren’t enough properties being built for everyone to have a roof over their head. Rogue landlords need to be put out of business, whilst tenants should expect a more regulated rental market, with greater security for tenants, where they can rely on good landlords providing them high standards from their safe and modernised home. As in Europe, where most people rent rather than buy, it doesn’t matter who owns the house – all people want is a clean, decent roof over their head at a reasonable rent.

So only you, the reader, can decide if buy to let is immoral, but first let me ask this question – if the private buy to let landlords had not taken up the slack and provided a roof over these people’s heads over the last decade .. where would these tenants be living now? ….. because the alternative doesn’t even bear thinking about!

19 Jan

Liverpool’s private renting set to hit 72,419 households by 2021 – Is Buy to Let immoral? (Part 1)

Can we blame the 55 to 70-year-old Liverpool citizens for the current housing crisis in the city?

Also known as the ‘Baby Boomer Generation’, these Liverpool people were born after the end of the Second World War as the country saw a massive rise in births as they slowly recovered from the economic hardships experienced during wartime.

Throughout the 1970’s and 1980’s, they experienced (whilst in their 20’s, 30’s and 40’s) an unparalleled level of economic growth and prosperity throughout their working lifetime on the back of improved education, government subsidies, escalating property prices and technological developments, they have emerged as a successful and prosperous generation.

…Yet some have suggested these Liverpool baby boomers have (and are) making too much money to the detriment of their children, creating a ‘generational economic imbalance’, where mature people benefit from house-price growth while their children are forced either to pay massive rents or pay large mortgages.

Between 2001 and today, average earnings rose by 65%,

but average Liverpool house prices rose by 134.9%

The issue of housing is particularly acute with the generation called the Millennials, who are young people born between the mid 1980’s and the late 1990’s. These 18 to 30 years, moulded by the computer and internet revolution, are finding as they enter early adult life, very hard to buy a property, as these ‘greedy’ landlords are buying up all the property to rent out back to them at exorbitant rents … it’s no wonder these Millennials are lashing out at buy to let landlords, as they are seen as the greedy, immoral, wicked people who are cashing in on a social despair.

Like all things in life, we must look to the past, to appreciate where we are now.

The three biggest influencing factors on the Liverpool (and UK) property market in the later half of the 20th Century were, firstly, the mass building of Council Housing in the 1950’s and 60’s. Secondly, for the Tory’s to sell most of those Council Houses off in the 1980’s and finally 15% interest rates in the early 1990’s which resulted in many houses being repossessed. It was these major factors that underpinned the housing crisis we have today in Liverpool.

To start with, in 1995 the USA relaxed its lending rules by rewriting the Community Reinvestment Act. This Act saw a relaxation on the Bank’s lending criteria’s as there was pressure on these banks to lend on mortgages in low wage neighbourhoods, as the viewpoint in the USA was that anyone (even someone on the minimum wage) any working class person should be able to buy a home.  Unsurprisingly, the UK followed suit in the early 2000’s, as Banks and Building Society’s relaxed their lending criteria and brought to the market 100% mortgages, even Northern Rock started lending every man and his dog 125% mortgages.

So when we roll the clock forward to today, and we can observe those very same footloose banks from the early/mid 2000’s (that lent 125% with a just note from your Mum and a couple of breakfast cereal tokens), ironically reciting the Bank of England backed hymn-sheet of responsible-lending. On every first time buyer mortgage application, they are now looking at every line on the 20-something’s banks statements, asking if they are spending too much on socialising and holidays … no wonder these Millennials are afraid to ask for a mortgage (as more often than not after all that – the answer is negative).

Conversely, you have unregulated Buy To Let mortgages. As long as you have a 25% deposit, have a pulse, pass a few very basic yardsticks and have a reasonable job, the banks will literally throw money at you … I mean Virgin Money are offering 2.99% fixed for 3 years – so cheap!

So, in Part Two next week, I will continue this emotive article and show you some very interesting findings on why young people aren’t buying property anymore (and it’s not what you think!).