7 Sep

Liverpool’s New 3 Speed Property Market

“What’s happening to the Liverpool Property Market” is a question I am asked repeatedly.  Well, would it be a surprise to hear that my own research suggests that there isn’t just one big Liverpool property market – but many small micro-property markets?

According to recent data released by the Office of National Statistics (ONS), I have discovered that at least three of these micro-property markets have emerged over the last 20+ years in the city.

For ease, I have named them the …

  1. lower’ Liverpool Property Market.
  2. lower to middle’ Liverpool Property Market.
  3. ‘middle’ Liverpool Property Market.

The ‘lower’ and ‘lower to middle’ sectors of the Liverpool property market have been fuelled over the last few years by two sets of buyers. The first set, making up the clear majority of those buyers, are cash rich landlord investors who are throwing themselves into the Liverpool property market to take advantage of alluringly low prices and even lower interest rates. The other set of buyers in the ‘lower’ and ‘lower to middle’ Liverpool property market are the first-time buyers (FTB), although the FTB market is in a state of unparalleled deadlock as it’s been trampled into near-immobility and incapacity by the new 2014 stricter mortgage affordability regulations and also fewer mortgages with low deposits.

Some of you may be interested to know how I have classified the three sectors ..

  1. lower’ Liverpool housing market – the bottom 10% (in terms of value) of properties sold
  2. lower to middle’ Liverpool housing market – lower Quartile (or lowest 25% in terms of value) of properties sold
  3. middle’ Liverpool housing market – which is the median in terms of value

…. and if one looks at the figures for Liverpool City Council area you can see the three different sectors (lower, lower/middle and middle) have performed quite differently.

Liverpool City Council Property Market – Sold Prices Price Paid in 1995 Price Paid in 2017 Percentage Uplift

1995 – 2017

Lower (Bottom 10%) £15,173 £52,000 342.71%
Lower to Middle (Lower Quartile) £23,000 £76,000 330.43%
Middle (The Median) £38,736 £139,003 358.85%

 

You can quite clearly see that it is the ‘middle’ market that has performed the best.

 

You might ask, what do all these different figures mean to homeowners and landlords alike?  Quite a lot – so let me explain. The worst performing sector (with the lowest Percentage uplift) was the ‘lower to middle’ housing market. Therefore, interestingly, if we applied the best percentage uplift figure (i.e. from the ‘middle’ market percentage uplift), to the ‘lower to middle’ 1995 housing market figure, the 2017 figure of £76,000, would have been £82,536 instead.

Now, I have specifically not mentioned the upper reaches of the Liverpool housing market for several reasons.  Firstly, the lower or middle market is where most of the buy to let investment landlords buy their property and where the majority of property transactions take place. Secondly, due to the unique and distinctive nature of Liverpool’s up-market property scene (because every property is different and they don’t tend to sell as often as the lower to middle market), it is much more difficult to calculate what changes have occurred to property prices in that part of the Liverpool property market – looking at the stats for the up-market Liverpool property market from Land Registry, only 29 properties in Liverpool (and a 5 mile radius around it) have sold for £1,500,000 or more since 1997.

So, what should every homeowner and buy to let landlord take from the information that there are many micro-property markets? Well, when you realise there isn’t just one Liverpool Property Market, but many Liverpool “micro-property markets”, you can spot trends and bag yourself some potential bargains. Even in this market, I have spotted a number of bargains over the last few months that I have shared in my Property Blog and to my landlord database, especially in the ‘lower’ and ‘lower/middle’ market. If you want to be kept informed of those buy to let bargains, have a look at my blog www.liverpoolpropretyblog.com it’s free to do so and I’m sure you wouldn’t want to miss out – would you?

I would love to know if you have spotted any micro-property markets in Liverpool.

31 Aug

Supply and Demand Issues mean Liverpool Property Values Rise by 3.5% in the Last 12 Months

The most recent set of data from the Land Registry has stated that property values in Liverpool and the surrounding area were 3.55% higher than 12 months ago and 10.06% higher than January 2015.

Despite the uncertainty over Brexit as Liverpool (and most of the UK’s) property values continue their medium and long-term upward trajectory. As economics is about supply and demand, the story behind the Liverpool property market can also be seen from those two sides of the story.

Looking at the supply issues of the Liverpool property market, putting aside the short-term dearth of property on the market, one of the main reasons of this sustained house price growth has been down to of the lack of building new homes.

The draconian planning laws, that over the last 70 years (starting with The Town and Country Planning Act 1947) has meant the amount of land built on in the UK today, only stands at 1.8% (no, that’s not a typo – its one point eight percent) and that is made up of 1.1% with residential property and 0.7% for commercial property. Now I am not advocating building modern ugly carbuncles and high-rise flats in the Cotswolds, nor blot the landscape with the building of massive out of place ugly 1,000 home housing estates around the beautiful countryside of such villages.

The facts are, with the restrictions on building homes for people to live in, because of these 70-year-old restrictive planning regulations, homes that the youngsters of Liverpool badly need, aren’t being built. Adding fuel to that fire, there has been a large dose of nimby-ism and landowners deliberately sitting on land, which has kept land values high and from that keeps house prices high.

Looking at the demand side of the equation, one might have thought property values would drop because of Brexit and buyers uncertainty. However, certain commenters now believe property values might rise because of Brexit. Many people are risk adverse, especially with their hard-earned savings. The stock market is at an all-time high (ready to pop again?) and many people don’t trust the money markets. The thing about property is its tangible, bricks and mortar, you can touch it and you can easily understand it.

The Brits have historically put their faith in bricks and mortar, which they expect to rise in value, in numerical terms, at least. Nationally, the value of property has risen by 635.4% since 1984 whilst the stock market has risen by a very similar 593.1%. However, the stock market has had a roller coaster of a ride to get to those figures. For example, in the dot com bubble of the early 2000’s, the FTSE100 dropped 126.3% in two years and it dropped again by 44.6% in 9 months in 2007… the worst drop Liverpool saw in property values was just 17.99% in the 2008/9 credit crunch.

Despite the slowdown in the rate of annual property value growth in Liverpool to the current 3.55%, from the heady days of 6.55% annual increases seen in late 2014, it can be argued the headline rate of Liverpool property price inflation is holding up well, especially with the squeeze on real incomes, new taxation rules for landlords and the slight ambiguity around Brexit. With mortgage rates at an all-time low and tumbling unemployment, all these factors are largely continuing to help support property values in Liverpool (and the UK).

For more thoughts on the Liverpool Property Market, please visit the Liverpool Property Market Blog www.liverpoolpropertyblog.com

30 Aug

National Bank Building, Fenwick Street, L2 7NE – One Bedroom Apartment – 11.9% Gross Yield!

A one bedroom property on the 5th floor of the National Bank Building has just made its way into my property search! The property has a fantastic asking price of £60,000, which is an unbelievable price for a property in this prime location in the heart of the business district in Liverpool.

Not only is this a great asking price, I also feel the potential for capital growth in this property will be excellent as the City continues to grow with new business opening constantly!

The apartment is currently let at £7,140 per annum. This is bringing back a very high gross yield of 11.9%!! Who could resist these figures?!

From the look of the pictures, it appears to be in fair condition, however I feel with a bit of freshening up there could be an increase in value for both the sale and the rental income of this property.

In my experience, properties in the business district always proves popular with tenants, as it allows City living, convenience of local amenities and ease of transport, without the noise and rush of Liverpool One. This particular development is just set back from Water Street and just a stone throw away from Castle Street where you will find plenty of bars and restaurants. Liverpool One is within walking distance, and Liverpool’s picturesque waterfront is just minutes away. Click Here to see this property on the map.

I also notice this property has a very long lease length of 982 years remaining, and all heating bills are included in the service charges, which is excellent for a hassle free investment!

I have had a look at previous sold prices in Fenwick Street, and compared to other 1 bed, this one appears very low.

Click Here to view the previous sold prices.

Click Here to view the property

If you would like any further advice on this property, development or any other properties, then please do not hesitate to contact me on adamr@liverpoolpropertyblog.com

24 Aug

Bingley Road, L4 2TB – Two Bedroom House With Tenant in Situ – 7% Yield!

I have stumbled across this immaculate three bedroom house, located in the popular L4 area. This property is located just off Priory Road, and minutes away from Breck Road where you will find local amenities including supermarkets, restaurants and bars.

The property is on the market for £87,500, which is an excellent price considering the size, location and current condition of the property.

This property is offered for sale only for investors, with a long standing tenant in situ who has maintained and decorated the property to a very high standard. It has a bright lounge, through diner and a nice clean kitchen, 3 large bedrooms and a shower room.

 

It is currently let to a lovely and reliable tenant who is paying £5,940 per annum. This is bringing back a gross yield of 7% based on an offer of asking price, which is an excellent return for a property in Anfield.

Although there is a tenant in situ who intends on staying long term, should she ever move out I do

 not feel this property would ever be empty for long! I would expect this property to attract families due to the ease of the local amenities nearby, the generously proportioned living space and the high volume of nearby schools, or it could even be used for Air B&B due to its close proximity to Anfield Stadium!

Click Here to see sold prices in the area

Click Here to view the property

 

If you would like any further advice on this property, development or any other properties, then please do not hesitate to contact me on adamr@liverpoolpropertyblog.com