While London frequently tops the list of desired property markets in the UK for overseas investors, recently the attention has shifted to flourishing regional cities like Liverpool. With the north-western city’s thriving economy, booming tourism industry and multitude of multimillion-pound regeneration projects in the pipeline, Liverpool is becoming an attractive destination for investors.
A major contributor to Liverpool’s growth has been the Northern Powerhouse initiative, which was originally created in 2015 to encourage greater collaboration between the major cities of the north, with new and improved transport links and investment into science and innovation, education, the arts and technology. As a result of this initiative, the Liverpool economy has boomed, catalysing the growth of the property market, driving up rental yields and house prices.
In addition to this historic initiative, a number of other factors are attracting UAE investors to Liverpool’s thriving property market.
Economic and employment growth
Liverpool’s economy is currently worth £29.5 billion (Dh151.97 billion) and is developing at a faster pace than the rest of the UK. The city is part of the UK’s second-largest regional economy and is home to 252,000 businesses, including global firms like Maersk, Barclays, Wealth, Jaguar, Land Rover, Unilever, Santander, KPMG, etc. Diverse industries and expanding employment are also producing a draw, with over 100,000 new jobs expected to be created by 2040.
Bolstering its economy, the city is also the UK’s largest wealth management centre outside London, handling more than £13 billion in assets. Additionally, Liverpool has been a globally recognised tourism hub, with over 58 million visitors flocking to Liverpool every year and a tourism sector worth £3.8 million. Both the job and tourism markets can only grow with the increase in labour, and with the extended workforce there is a higher demand for housing, driving prices up.
Regeneration and investment
A key factor driving Liverpool’s rental market is the increasing number of upcoming developments. The city has been steadily regenerating for over three decades, and with huge commercial investment in projects such as the £1-billion retail district Liverpool One, and the Baltic Triangle’s Cains Brewery Village, a 1-million-sq-ft, £150-million leisure and retail development with brewery, boutique hotel, shops and food hall set to contribute £25 million each year to the local economy.
Liverpool has been surging ahead as a business, cultural and tourism hub.
One area that is garnering significant interest is Liverpool Waters, a £5-billion plan to transform Liverpool’s Northern Docks into a high-quality waterfront quarter of residential, commercial and leisure space for Liverpool’s city centre. Plans for a new cruise liner terminal, public park and, at the zone’s northern end, a new stadium for Premier League football team, Everton FC, alongside new waterside offices, high-rise residential towers, restaurants and hotels will mop up demand for new places to work, play and live as Liverpool’s economy continues its 15-year run of unbroken growth.
Sales and rental markets
Since 2015, Liverpool house prices have gone up by 14 per cent (land registry) and this property price growth is expected to continue with a 17.5 per cent growth forecast between 2018 and 2021.
Liverpool rental yields are some of the highest in the UK at 6.2 per cent on average. This has led to the city being crowned one of the best buy-to-let cities in the UK by LendInvest.
Liverpool rental yields are some of the highest in the UK at 6.2 per cent on average. This has led to the city being crowned one of the best buy-to-let cities in the UK by LendInvest. For example, IP Global’s The Levels, a boutique residence located in the grade II-listed Tower Building, sold out within days of launch in January last year.
Liverpool’s future is bright as rental growth is on an upward trajectory with 14.7 per cent growth predicted from 2018-21. Private renting is becoming popular, with two-thirds of homes in the city centre privately rented. A growing number of young professionals are driving up demand for high-quality housing, too, particularly in established city centre areas and on the waterfront.
Quay Central targets investors from the UAE
The UK has always been a popular market for our investors, but outer London and regional cities such as Liverpool have significantly become the new investment hotspot in the UK. This month we have successfully launched Quay Central, our premium development set in Liverpool Water’s entertainment, business and leisure hub, Central Docks, which we anticipate will be popular among our UAE investors.
Liverpool is a rising star in the UK property market. With limited supply and rapidly increasing demand for superior housing in the heart of the city, property investors would be prudent to consider opportunities here.
Richard Bradstock is director and head of the Middle East at IP Global, a property investment company. The views expressed here are his own.