Is Liverpool a Good Place to Invest in Property?

Liverpool is home to one of the fastest-growing property markets in the UK. Though the city is growing in popularity, properties available for investment in Liverpool are still incredibly affordable. 

While annual rent costs have increased by 8.9%, property costs have only increased by 1.8%, substantially lower than the overall 2.9% rise that the rest of the North West experienced. 

At Lyons, we know the potential that can be achieved if you invest in a property in Liverpool. 

People are flooding in to invest in property in the area, and there is no wonder why. If you are considering investing in property in Liverpool, here is an overview of the pros and cons of making a property investment in Liverpool.

Why Liverpool Is a Good Place to Invest in Property 

Here are some of the reasons why people are choosing to invest in property in Liverpool.

High Rental Yield

Liverpool has the highest rental yields in the whole country, the average being around 7.92%.

This figure only seems to be growing, and as the city continues to grow in popularity, rental yields will only go up. 

Rental Opportunities in Liverpool

A big reason why people are investing in property in Liverpool is because of the available rental opportunities. 

Liverpool has a huge rental market, and people come from worldwide to live here. Because of its location, it is a prime landing point for international migration. 

The city is home to 7 universities, meaning people travel all over the UK to attend university in the city. There has been considerable growth in the number of HMOs and more significant rental properties available. Yet, housing is still insufficient to cater to all students entering the city.

There are plenty of opportunities to make significant money by creating more properties for students to live in. You can expect substantial profit margins if you’re considering a property investment. Student housing is definitely worth some consideration.

You should also consider short-term rentals. Liverpool is a tourist hotspot, so people constantly travel here for city breaks. You could make considerable profits if you bought a property and converted it into a short-term rental.

Families in Need of Private Properties

Liverpool is experiencing a rental crisis at the moment. Many available properties either have high rent prices or are owned by the council and reserved for those in need.

For these reasons, people who have lived in the city their entire lives are finding it hard to find a property, so there is an outcry for dependable private landlords. 

With high renting prices, even if you are offered a property at a significantly discounted price, you still have the opportunity to make plenty of money.

Average Cost of Properties in Liverpool

Liverpool has one of the most affordable housing markets in the whole of the UK. As of April 2024, the average house price in Liverpool was around £175,000. Though rent prices are increasing, house prices have actually decreased by 1%.

Those figures cover a general cost; more precise costs as of May 2024 include:

• Semi-detached properties: £214,000.
• Terraced properties: £152,000.
• Detached properties: £340,000.

If you compare these property prices with those in major cities, Liverpool is significantly more affordable than other cities.

Other factors that will lower the cost of properties, such as necessary repairs, should be considered.

Investing in Houses or Apartments 

If you decide to invest in property in Liverpool, you will likely be torn between buying houses or apartments.

Liverpool is an old city with a selection of beautiful homes and converted apartments, so we understand why it may be a tough choice. 

Before you decide, you must first establish why you will be purchasing the property. Do you wish to live in it, or do you want to rent it out?

If you intend to rent out the property, purchasing a house may offer you many more opportunities to make money. With an apartment, you are limited by space, and it can be challenging to develop what room you have.

If you buy a house, you have a lot more room for movement and the opportunity to develop it into a great source of income.  A lot of property investors are turning properties into student houses or HMOs. 

Remodelling the property to be used as such can yield many benefits, but it does come with its own work and responsibilities, so you should definitely take some time to research before you make any decisions. 

Benefits of Investing in Property

If you are not completely convinced that investing in property is the right move for you, here are some of the benefits of buying a property. 

Capital Growth

One of the most significant benefits of investing in property is capital growth, which means that the value of your property increases over time.

Though property value can depreciate over time, you can see very handsome returns if you are smart with your investment and look into the scape around your property.

Tax Advantage

Another considerable advantage of investing in property is the associated tax benefits. If you plan on renting out a property, you can claim back the renovation costs on your tax return.

If you consider creating a holiday rental property, you could receive substantial tax relief. Because a rental holiday property is deemed a trade, you can write off your mortgage interest costs as a business expense, allowing you to make considerable savings on your property.

Property Investments are the Best-Performing Asset Class 

Studies show that since 1996, buy-to-let investors have seen returns of up to 1,400%. This is substantially more than other investment opportunities, such as bonds and shares, so if you are looking for a reliable stream of income, you should definitely consider investing in property.

Advantages of Investing in Liverpool 

We have already touched on why Liverpool is such a good investment opportunity, but we would like to reiterate some of the key benefits of investing in Liverpool:

• Prime location.
• Strong northern economy.
• High-value industries on the doorstep. 
• Beautiful properties at an affordable price. 

Liverpool is a cultural hub that attracts influential people, so if you have the right property, you may be able to attract a renter with a sizeable disposable income. 

Pitfalls of Investing in Property

It is important for us to offer comprehensive and dependable advice to those who are considering investing in property, so we will discuss some of the potential pitfalls of this investment. 

Maintenance Costs

Not every property available on the market will be in perfect condition. That is just how it works in property development; if you want to get a property at a reasonable price, you will probably have to do some work on it. 

Though improving your property can be costly, there are some advantages to it. Not only can you increase its value, but you can also personalise it to reflect your tastes. 

In Liverpool, dozens of beautiful, antiquated properties are looking for a new lease on life and have the potential to be transformed into something brilliant. 

Potential Problems With Tenants

If you are looking to rent your property out, a risk that you may encounter is having problems with tenants. Before signing a contract with any tenant, you should get to know them to see if they are a good fit.

However, people can surprise you; even if someone seems nice, they may be a bad tenant. You should keep this in mind when deciding to rent.  

The law has significantly improved in terms of protecting landlords, so if you have any issues with a tenant, you can evict them if necessary.

Disclaimer

Though we believe Liverpool is a prime location to purchase property, we understand that life can be unpredictable, and anything can happen when you buy a property. At Lyons, we do not take any responsibility for any investments you choose to make. 

Liverpool is a Good Place to Invest in Property

If you are sure you would like to purchase property, Liverpool is the best space to do so. Not only is Liverpool home to a culturally rich and thriving community, but the property market is thriving. 

Liverpool’s properties are affordable and in excellent locations, and they have the potential to make a lot of money if you choose to create a rental property. 

At Lyons, we are passionate about Liverpool and happy to answer any further questions you may have about investing in the city. Get in touch today.