Liverpool is one of the fastest growing cities in the UK, making it an attractive place for many young people to move and seek their next career move. As a result of that, the demand for properties in and around Liverpool is steadily increasing.
The growth the city of Liverpool has seen over the last several years has caught the eye of investors, many of which are asking if Liverpool is a good place to invest in property.
To help make your mind up, in this article, we’ll provide you with an overview of the current state of the rental market in Liverpool, the rental yield you can expect, and other relevant information. And by the end, you’ll have a crystal-clear idea of whether the Liverpool property market is a good place for you to invest your money.
What Does Liverpool’s Rental Market Look Like?
The average price of a property in Liverpool is around £211,000. With that said, certain parts of Liverpool are significantly more expensive than others. For instance, properties in Everton can be as low as £115,000 while properties in Falkner Street average at around £790,000.
Whatever the case might be, properties all over Liverpool have seen a hike in prices over the last few years, rising by around 13% in the last year alone. This is significantly higher than most places from around the UK, including Manchester and London.
And although the market has started to slow down in recent months, experts believe that it will continue to rise in the coming years. These unique circumstances open a window of opportunity for investors looking to purchase an investment property in the area while prices are still relatively affordable.
What Rental Yield Can Investors Expect?
Rental yields in Liverpool are lower compared to other big cities nearby. On the low end, some rental units yield just 2.5% while others can yield as much as 6.3% and higher. The rental yield you can expect from your property in Liverpool will greatly depend on its location and value.
Postcodes such as L39 and L34, which cover the areas of Ormskirk, Prescot, and Knowsley are seen as the worst in terms of rental yield in the whole area. House prices are high while the average rent is not so much.
On the flip side, postcodes such as L20, L5, and L4 are seen as the best places to invest if you’re after the biggest rental yield. These postcodes cover the areas of Bootle, Everton, and Anfield, where the average cost of a home is around £120,000.
How Can You Become a Landlord in Liverpool?
Becoming a landlord in Liverpool isn’t as simple as buying a property and renting it out to a tenant. Depending on where your property is situated, it may require a special license. Without this license, you won’t be able to rent it out. Currently, there are 16 wards in Liverpool where landlords require a rental license. Some of the areas where a license is necessary include Central, Riverside, Greenbank, and Kensington.
Aside from the license (if necessary), as a landlord, you must also familarise yourself with all the local rules and regulations. That way, you know what you can and can’t do before you rent out your property. Making sure to cover all legal grounds is necessary for the smooth operation of your rental property not just for you but also for your tenant.
Should I Invest in a Flat or a House?
When it comes to buying a rental property, your two best bets are a standard house or a flat. On one hand, flats are cheaper than the average house, making them a more lucrative investment for investors without that much capital. Flats are also cheaper and easier to maintain. They are also in very high demand, especially if they’re located in prime areas such as near or in the city center.
As for houses, they are typically more expensive and costlier to maintain. With that said, with the hike of property prices, houses typically see a bigger increase in value, especially those in more affluent areas.
When deciding on whether to invest in a house or a flat, it’s best to consider your budget, what type of tenant you want to attract, and in which part of Liverpool you want to buy your rental property in.
Flats tend to attract younger people, are cheaper, and are mostly located in the city center while houses attract older adults, are a little bit more expensive, and are located outside of Liverpool. Nevertheless, both offer a fantastic opportunity to invest your money and not only get rent out of them, but also get a positive return on your investment when you end up selling the property.
What Happens If You Want to Stop Investing?
Should a time come where you no longer want to be a landlord, there are a few different routes you can take. The first one is to take yourself out of the equation and let a rental estate agent in Liverpool manage your property. This will come at a cost, but you won’t have to deal with finding a tenant, sorting contracts, collecting payments, and other repetitive tasks that can be quite the headache to deal with.
If you no longer want to have anything to do with being a landlord, you can cash in on your properties, get your money, and call it a day. If you currently have tenants, selling a tenanted property in Liverpool might seem like a challenge at first. However, it really isn’t.
To sell a tenanted property, all you need to do is work with an estate agent such as We Buy Any Home who can help take care of all the stress and hassle for you. Whatever you decide to do with your rental property, just know that there are plenty of options for you to explore.
Should I Invest in Liverpool Property?
Liverpool can be a great place to invest in property, as long as you allocate your money in a property that is in high demand, such as flats in the city center or affluent areas with high rental yields.
With all that in mind, it’s worth mentioning that Liverpool is a growing city. Though rental prices have been rising steadily over the past couple of years, we are still far away from reaching the peak. So, if you’re interested in the idea of investing in property in Liverpool, make sure to do it quickly as properties are quickly disappearing from the market for that very reason.