29 Jun

Council House Waiting List in Liverpool Drops by 29.3% in last 6 years

Should you buy or rent a house? Buying your own home can be expensive but could save you money over the years. Renting a property through a letting agent or private landlord offers less autonomy to live by your own rules, with more flexibility if you need to move.

Yet, there is third way that many people seem to forget, yet it plays an important role in the housing of Liverpool people. Collectively known as social housing, it is affordable housing, which is let by either Liverpool City Council or a housing association to those considered to be in specific need, at rents below those characteristic in the private rental market.

In Liverpool, there are 66,246 social housing households, which represent 27.31% of all the households in Liverpool. There are a further 15,008 families in the Liverpool City Council area on their waiting list, which is similar to the figures in the late 1990’s. The numbers peaked in 2010, when it stood at 21,238 families, so today’s numbers represent a drop of 29.3%.

Nevertheless, this doesn’t necessarily mean that more families are being supplied with their own council house or housing association property. Six years ago, Westminster gave local authorities the authority to limit entitlement for social housing, quite conspicuously dismissing those that did not have an association or link to the locality.

Interestingly, the rents in the social rented segment have also been growing at a faster rate than they have for private tenants. In the Liverpool City Council area, the average rent in 1998 for a council house/housing association property was £178.19 a month. Whilst we have no up to date figures, because of the ‘Large Scale Voluntary Transfer’ of all or most of the local authority’s stock was transferred to a Private Registered Provider sector, so the average rent is no longer applicable. Therefore, using the average rent increase for England of 108% (England’s average rent being £183.08 a month in 1998 and £381.03 a month today) we can guesstimate an average of approximately £370.

When comparing social housing rents against private rents, the stats don’t go back to the late 1990’s for private renting, so to ensure we compare like for like, we can only go back to 2005. Over the last 12 years, private rents have increased nationally by a net figure of 19.7%, whilst rents for social housing have increased by 59.1%.

So, what does this all mean for the homeowners, landlords and tenants of Liverpool?

Rents in the private rental sector in Liverpool will increase sharply during the next five years. Even though the council house waiting list has decreased, the number of new council and housing association properties being built is at a 70 year low. The government crusade against buy-to-let landlords together with the increased taxation and the banning of tenant fees to agents will restrict the supply of private rental property, which in turn using simple supply and demand economics, will mean private rents will rise – making buy to let investment a good choice of investment again (irrespective of the increased fees and taxation laid at the door of landlords).  It will also mean property values will remain strong and stable as the number of people moving to a new house (and selling their old property) will continue to remain restricted and hence, due to lack of choice and supply, buyers will have to pay decent money for any property they wish to buy.

Interesting times ahead for the Liverpool Property Market!

22 Jun

Are Liverpool First Time Buyers Being Squeezed Out Of The Housing Market?











I received a very interesting letter the other day from a Liverpool resident. He declared he was a Liverpool homeowner, retired and mortgage free. He stated how unaffordable Liverpool’s rising property prices were and that he worried how the younger generation of Liverpool could ever afford to buy? He went on to ask if it was right for landlords to make money on the inability of others to buy property and if, by buying a buy to let property, Liverpool landlords are denying the younger generation the ability to in fact buy their own home.

Whilst doing my research for my many blog posts on the Liverpool Property Market, I know that a third of 25 to 30 year olds still live at home. It’s no wonder people are kicking out against buy to let landlords; as they are the greedy bad people who are cashing in on a social woe. In fact, most people believe the high increases in Liverpool’s (and the rest of the UK’s) house prices are the very reason owning a home is outside the grasp of these younger would-be property owners.

However, the numbers tell a different story. Looking of the age of first time buyers since 1990, the statistics could be seen to pour cold water on the idea that younger people are being priced out of the housing market. In 1990, when data was first published, the average age of a first time buyer was 33, today it’s 31.

Nevertheless, the average age doesn’t tell the whole story. In the early 1990’s, 26.7% of first-time buyers were under 25, while in the last five years just 14.9% were. In the early 1990’s, four out of ten first time buyers were 25 to 34 years of age and now its six out of ten first time buyers.

Although, there are also indications of how un-affordable housing is, the house price-to-earnings ratio has almost doubled for first-time buyers in the past 30 years. In 1983, the average Liverpool home cost a first-time buyer (or buyers in the case of joint mortgages) the equivalent of 2.4 times their total annual earnings, whilst today, that has escalated to 3.8 times their income (although let’s not forget, it was at 4.6 times their income for Liverpool first time buyers in 2007).

Again, those figures don’t tell the whole story. Back in 1983, the mortgage payments as percentage of mean take home pay for a Liverpool first time buyer was 25.0%. In 1989, that had risen to 41.6%. Today, it’s 23.8% … and no that’s not a typo .. 23.8% is the correct figure.

So, to answer the gentleman’s questions about the younger generation of Liverpool being able to afford to buy and if it was right for landlords to make money on the inability of others to buy property? It isn’t all to do with affordability as the numbers show.

And what of the landlords? Some say the government should sort the housing problem out themselves, but according to my calculations, £18bn a year would need to be spent for the next 20 or so years to meet current demand for households. That would be the equivalent of raising income tax by 4p in the Pound. I don’t think UK tax payers would swallow that.

So, if the Government haven’t got the money… who else will house these people? Private Sector Landlords and thankfully they have taken up the slack over the last 15 years.

Some say there is a tendency to equate property ownership with national prosperity, but this isn’t necessarily the case. The youngsters of Liverpool are buying houses, but buying later in life. Also, many Liverpool youngsters are actively choosing to rent for the long term, as it gives them flexibility – something our 21st Century society craves more than ever.

19 Jun

Bold Place, Liverpool, L1 – Holiday Rental (AirBNB)

Over the last 6 months, I’ve received lots of calls from investors asking for my advice on holiday rental properties or short term lets through websites such as AirBNB. This can be a great way of increasing your yield on a investment property and I’ve known a few investors who have done very well. Not only can you achieve a higher rental income over a shorter period but the tax implications are more beneficial than a standard buy to let investment meaning you can still offset all of your mortgage interest payments against your income. Obviously, it’s a lot more time consuming as you have a higher turnaround of visitors to your property but it can still work very well in Liverpool due to the many visitors coming to Liverpool.

The main factor to why people contact me is because it is very hard to find city centre developments that will allow properties to be let out in this way as most leases forbid any short term lets as it has been know that people can rent properties to host parties causing issues for other residents.

The property that I have spotted is a one bedroom property located off Berry Street that could be potentially used as AirBNB (I would advise that you check through the lease to confirm that holiday rentals are permitted before purchasing) for only £79,950. This property could be marketed as a two bedroom property (sofa bed in the lounge) and could achieve between £65 – £150 per day. Weekend prices increase due to the high demand in Liverpool. Click here to view the property that is available through Entwistle Green.

I do know people who can manage your AirBNB rental property on your behalf and they can vet the potential visitors to mitigate any potential issues that could possibly happen. If you would like me to put you in touch with them, then contact me on adamr@liverpoolpropertyblog.com


15 Jun

22.1 miles – The average distance people go to escape living in Liverpool

“How far do Liverpool people go to move to a new house?” This was an intriguing question asked by one of my clients the other week. Readers of my property blog will know I love a challenge, especially when it comes to talking about the Liverpool Property Market!

For the majority, the response is not very far. It is much more common for homeowners and tenants in Great Britain to move across town than to the next town or county. Until now, it’s been hard to say how many homeowners and tenants moved from (and to) relatively far away to buy or rent their new home. However, I carried out some research and requested some statistics from the Royal Mail. What came back was fascinating!

Using statistics for the 12 months up to the middle of Autumn 2016, 152 households moved out of Liverpool (L12), moving an average distance of 22.18 miles – the equivalent of moving from Liverpool to Bolton (as the crow flies).  The greatest distance travelled was 187 miles – that’s more than 7 marathons (when someone moved to Freethorpe in Norfolk).

Considering there were 320 property sales in L12 in the year and countless tenant moves, the numbers seems consistent – once you find a city you like, you tend to want to settle down and if you do move, you might only move to a different neighbour-hood, or for better transport links or, to be closer to the school you want to get your children into, but the likelihood is you won’t travel far.

I then turned my attention to people moving into Liverpool. Using the same statistics for the 12 months up to the middle of Autumn 2016, 165 households moved into Liverpool (L12), moving an average distance of 32.87 miles – the equivalent of moving from Macclesfield to Liverpool (again as the crow flies). The greatest distance travelled was 296 miles – that’s more than 11 marathons (when someone moved from Fraserburgh in Scotland to Liverpool).

I have looked at the data of every person moving into Liverpool and these have been plotted on a map of the UK. Looking at the map below, it shows exactly where most people come from, when moving into Liverpool. As you can see, there are a high proportion of people moving from the London area.

So, what does all this mean for the landlords and homeowners of Liverpool?

When an agent markets a property for rent or let, it is vital to know the tenant or property buyer well, that the properties they are letting/selling fit those tenants/buyers, so they almost sell themselves. These days that means not only knowing how many bedrooms, reception rooms etc., a property offers but the budget buyers and tenants want to spend on a property in that area as well as where they come from.

The estate and lettings industry loves the mantra “location, location, location”. I say it might be helpful to factor in where (and how) far people are moving from, so the property can be sold or let more easily. Many say knowledge is power and whilst I do enjoy writing my blog on the Liverpool property market, I also use the information to help my clients buy, let and sell well. So for example, the information gained for this article, will enable my team and I to be more efficient in where to direct our marketing resources to ensure we maximise our clients’ properties sale-ability or rent-ability.

For more information on the Liverpool property market, visit the Liverpool Property Market Blog www.liverpoolpropertyblog.com