Once it was famous as a gateway to the British empire, and later as the birthplace of the Beatles. Now the port city of Liverpool is once again attracting international attention but this time as a buy-to-let hotspot offering some of the highest yields in the UK.
With relatively low prices and strong rents, Liverpool landlords enjoy an average yield of 8% – higher than any other UK city, according to recent research by mortgage group Private Finance. While there is a range of attractive opportunities, some of the highest yields and lowest entry prices are to be found in student accommodation.
Liverpool’s growing student population means that demand has been outstripping supply in recent years. The three main establishments – the University of Liverpool, John Moores University and Hope University – between them attracted 60,000 students in 2016/17, up from 50,000 the year before, and the number is expected to rise again in the current academic year.
These are in addition to the number studying at the two specialist centres – the Liverpool Institute of Performing Arts, which was launched in 1996 by former Beatle, Sir Paul McCartney, and the School of Tropical Medicine.
It is easy to see the attraction. “Liverpool is one of the UK’s most student friendly cities,” says Matt Lavin of Benoit Properties International. “It has everything that they are looking for – high quality education, a lower cost of living – it has been classed as the cheapest city in Britain for students, after Portsmouth – and a buzzing nightlife and music scene.”
As a historic maritime city, Liverpool has long had an international flavor and is home to Europe’s oldest Chinatown and the UK’s oldest black African community. With over 1,000 listed buildings, reflecting its wealthy past, it has a more grandiose and dramatic feel than its rival Manchester. It also has a wealth of culture including the Walker Art Gallery, Tate Liverpool, The World Museum.
Liverpool is the fifth most popular city in the UK for overseas visitors, who are attracted in part by its connections with the Beatles. The city region welcomed over 62 million visitors in 2016, an increase of nearly a million on 2015.
Liverpool also has a very distinct identity and the locals – known as Scousers – are renowned for their sense of humour and fun. Major investment and regeneration work has transformed the old docklands and city centre and the city has a vibrant and dynamic feel, driven in part by visitor numbers but also by the high student population.
According to lettings specialists the Mistoria Group, 60% of students require accommodation and demand this year is up by 19% on 2016, with 6.6 tenants for every shared room in the new properties. The average rent now stands at £128 per week, up by 23% on last year.
According to a report last year by wealth managers the Merrion, based on the industry norm of 68% of students requiring accommodation, provision in Liverpool for the 2017 academic year of 27,066 rooms indicated a shortfall of 21,900 managed bed spaces. Even if the 6,892 rooms with planning permission were built out, there would still be a shortfall of over 15,000 rooms.
Matt Lavin added: “The Northern Powerhouse cities have been outperforming London in recent years and in terms of yields, Liverpool is in top place. The growth in demand for student accommodation means that this part of the market offers the highest returns of all. While the Brexit talks have created some uncertainty, the shortage of supply and continued demand for university places mean that high-quality student apartments continue to be an excellent investment opportunity.”
Benoit Properties is offering Liverpool buy-to-let property with prices starting from only £52,950.