In addition to being the dominant force in European football, Liverpool is now top of the table for the UK property market, leading the way in terms of both house price growth and short-term rental yields.
The UK property market is currently in a holding pattern with not much happening at all. The recent Nationwide House Price Index shows that UK property has had, a year-on-year growth of, at best, a paltry 1%. But, there is a shining light in our green and pleasant land and this is the north-west of England and in particular Liverpool. It’s cities like Liverpool, Manchester and Preston that are keeping the data from falling into negative territory, smoothing over the property market cracks caused by the southern half of the country.
The latest hometrack UK Cities House Price Index reveals that Liverpool, along with Edinburgh, saw property price increases of 5.8% over the past year – more than any other UK city. Portico Host, meanwhile, reports that landlords in some parts of Liverpool are achieving short-term letting yields of 27.2%. The yields are the best reported across both Liverpool and Manchester. Longer-term yields in the same area were reported to reach 13.6%.
According to independent property service Acentus Real Estate, figures such as these should be familiar fodder to those looking to invest in the UK’s private rented sector. The company behind The Metalworks in Liverpool, which will see construction start during September, Acentus Real Estate is led by Simon Clarke, who recently shared his top investment tips for those looking to profit from buy-to-let properties.
Top tips for investing in buy-to-let
Think broadly in terms of location
Simon Clarke points out that investors should focus on which cities have been achieving long-term growth in terms of house prices, as well as a range of other economic factors. He cites Liverpool as an example of a city that ticks all the boxes when it comes to financial stability. From its employment rate to its GVA, the city has much that makes it attractive to those looking to profit from a property over the longer term.
Use hyper-local focus to identify the right area
Identifying a city is only the first step in finding the right location. It’s then a matter of finding the right part of that city. This is the time to focus on area-by-area yields, as well as the location of key regeneration areas and future proposed schemes.
Just a short walk from Liverpool city centre and adjacent to the city’s business district, which is under consideration for a major overhaul, The Metalworks is a good example of this hyper-local focus in action. It’s not just in the right city, but in the right location within that city.
Investigate the amenities
Next, it’s time to think about amenities. These are ever-more important to renters, so investors should be equally interested in them. Apartments that come with a concierge service, pretty podium gardens and well-equipped gym, such as those at The Metalworks, can not only command premium rents, but are also likely to enjoy higher demand – all of which benefits those who invest in them.
“Next to location, a development’s amenities are one of the most important factors to consider before making an investment. If the building has features that make it stand out from the crowd, that’s going to increase its appeal to renters, helping to improve yields and avoid void periods.” – Simon Clarke, Director, Acentus Real Estate
Shop around for your mortgage
There are plenty of buy-to-let mortgage products on the market these days. In fact, a quick search for buy-to-let mortgages on Compare the Market, using the site’s pre-filled criteria, results in 393 product options at the time of writing. With so many products available, investors who are using a mortgage for their buy-to-let property purchase have plenty of choice over the terms of their borrowing.
Budget for ongoing costs
Finally, be sure to budget for items such as maintenance, letting agency costs and managing agency fees over the longer term. Understanding from the outset what these costs might be is an essential part of calculating your likely yields and the development’s ongoing viability.