21 Dec

64.64% of Liverpool is Built on … Building Plot Dilemma or Not?

Well the fallout from the recent Budget is still continuing.  I was chatting to a couple of movers and shakers from the Liverpool area the other day, when one said, “There isn’t enough land to build all these 300,000 houses Philip Hammond wants to build each year”.

…and if you read the Daily Mail, you would be forgiven for thinking the Country was at bursting point … or is it?

It was 60 years ago the first satellite was launched (Sputnik). All the Superpowers have used them to take high definition pictures of each other for decades, but now satellites and their high-powered cameras are being used for more peaceful purposes. The European Environment Agency (EEA) have been taking high definition pictures of the UK from outer-space to give us a focused picture of what every corner of the Country really looks like … and the findings will come as a surprise.

As my blog readers know, I always like to ask the important questions relating to the Liverpool property market. If you are a Liverpool landlord or Liverpool homeowner, this knowledge will enable you to make a more considered opinion on your direction and future in the Liverpool property market. Like every aspect of all economic life, it’s all about supply and demand, because over the last twenty or so years, there has been an imbalance in the British (and Liverpool) housing market, with demand outstripping supply, meaning the average value of a property in Liverpool has risen by 249.73%, taking an average value from £36,600 in 1995 to £128,000 today.

Using the information from the EEA and data crunched by Sheffield University with their Corine-Land Cover project, I posed them a few questions about the local area, interesting questions I would like to share with you …

  1. What proportion of the whole of Liverpool is built on?

64.64%

That surprised you, didn’t it! In the study, land classified as ‘urban fabric’ defined has land which has between 50% and 100% of the land surface is built on, (meaning up to a half might be gardens or small parks, but the majority is built on).

  1. How much land is intensively built on locally?

Of that amount mentioned above, how much of it is high-density urban fabric? (i.e. where 80% to 100% is built on – still leaving 20% for gardens)  2.42%  – again I bet that surprised you!

  1. So how is the land used locally?

Sports and Leisure              2.52%

Port Areas                           4.68%

Industry                               12.0%

Green Urban Areas             10.41%

…the rest being made up of various other minor types such as airfields and forests, etc.

Liverpool and the surrounding areas are greener than you think! In fact, I read that property covers less of the UK than the land revealed when the tide goes out. The assumption that vast bands of our local area have been concreted over doesn’t stand up to inspection. However, the effect of housing undoubtedly spreads beyond its actual footprint, in terms of noise, pollution and roads.

Now I am not suggesting for one second we concrete over every inch of the locality, but the bottom line is we, as a country, are growing at a quicker rate than the households we are building. I appreciate the emotional effect of housing is greater than other land use types because most of us spend the vast majority of our time surrounded by it. As Brits, we live our lives driving along roads, walking on footpaths and working and living in buildings meaning we tend, as a result, to considerably overemphasise how much of it there is.

In fact, I was only flying home recently back from a short break abroad, when I looked down and I was reminded just how green Britain actually is!

The bottom line is Liverpool people and the local authorities are going to have to put their weight into building more homes for people to live in. There is going to have to be some give and take on both sides, otherwise house prices will continue to rise exponentially in the future and Liverpool youngster’s won’t be able to buy their own Liverpool home, meaning Liverpool rents and demand for private rented accommodation in Liverpool can (and will) also grow exponentially.

14 Dec

Liverpool Property Market and Hammond’s Budget Promise to Build 300,000 more homes

I miss the good old days of George Osborne as Chancellor, with his hardhat and hi-vis jacket. He must have visited every new home building site in the UK with his trademark attire! For the last few years, the nearest Philip Hammond got to donning a ‘Bob the Builder’ outfit was at his grandchild’s birthday party. However, with what appears to be a change in focus by the Tories to ensure they get back in power in 2022, they appear to have fallen in love with house building again with the Chancellor’s promise to create 300,000 new households in a year.

Nationally, the number of new homes created has topped 217,344 in the last year, the highest since the financial crash of 2007/8. Looking closer to home: in total there were 3,485 ‘net additional dwellings’ in the last 12 months in the Liverpool City Council area, a decent increase of 119% on the 2010 figure.

The figures show that 72% of this additional housing was down to new build properties. In total, there were 2,526 new dwellings built over the last year in Liverpool. In addition, there were 914 additional dwellings created from converting commercial or office buildings into residential property and a further 81 dwellings were added as a result of converting houses into flats.

Whilst these all added to the total housing stock in the Liverpool area, there were 36 demolitions to take into account.

Net additional dwellings in Liverpool in the last 12 months:
 
New Builds – 2,526
Conversions – 81
Change of Use – 914
Demolitions – minus 36
Net Additions – 3,485

I was encouraged to see some of the new households in the Liverpool area had come from a change of use. The planning laws were changed a few years back so that, in certain circumstances, owners of properties didn’t need planning permission to change office space in to residential use.

With the scarcity of building land available locally (or the builders being very slow to build on what they have, for fear of flooding the market), it was pleasing to see the number of developers that had reutilised vacant office space into residential homes in the local council area. Converting offices and shops to residential use will be vital in helping to solve the Liverpool housing crisis especially, as you can see on the graph, that the level of building has hardly been spectacular over the last seven years!

2010 – 1,590
2011 – 894
2012 – 942
2013 – 896
2014 – 1,002
2015 – 1,509
2016 – 2,020
2017 – 3,485

Now we have had the autumn budget, Theresa May and Philip Hammond have set out their stall with housing as their key focus. I was glad to see the Government introducing a variety of changes to improve housing, including more funding for the supply side and an injection of urgency into the planning system.

The biggest question is, just where are the Government going to build all these new houses? Maybe a topic for a future article?

Back to the main point though and the focus on the housing market by the Tory’s is good news for all homeowners and buy to let landlords, as it will encourage more fluidity in the market in the longer term, sharing the wealth and benefits of homeownership for all. However, in the short term, demand still outstrips supply for homes and that will mean continued upward pressures on rents for tenants.

6 Dec

Richmond Park – 3 Bedroom Terraced House – £70,000 – 8.6% Gross Yield!!

I’ve noticed a drop in the number of properties on the market coming up to Christmas, however this property has just caught my eye!

The property is a 3 bedroom mid terrace house, with an asking price of over £70,000; which appears in good condition and could be let out straight away. The property benefits from a modern Kitchen, double glazing, central heating and a rear yard.

If rented out, then I would suggest a rental income of around £500pcm and if the property could be purchased for £70,000 then it would generate a good gross yield of 8.6%.

Properties in this road always seem to prove popular with long standing tenants, and this property in particular is the perfect family home. With well proportioned rooms, and the number of local schools, it is easy to see why!

click here to view the property.

 

If you want more information on this property or any other properties, then contact me on adamr@liverpoolpropertyblog.com

4 Dec

Unconventional two bedroom house – Old Swan – Potential Gross Yield of over 8%

 

 

 

 

I’ve spotted a 2 bedroom house that may not be conventional but would return a good gross yield of approx. 8%

The property is located in Old Swan, which is a very popular area for tenants and owner occupiers so this newly refurbished property offers great value with a good return. A conventional two bedroom houses in the area would achieve between £75,000 to £90,000 so with the price of £64,950 for this house, shows that it would be great deal.

The property is new on the market with local agents Acumen Estates click here to see advert and I can’t see it being on the market for too long.

If you want any information or advice on this property or any other properties, then contact me on adamr@liverpoolpropertyblog.com