Property development finance in Liverpool
It is now well over a decade since Liverpool was crowned European Capital of Culture. Famous for its music scene, sporting success and rich maritime history, the city has continued to strengthen its cultural and creative credentials ever since.
Independent businesses form an important part of the city’s makeup, and include everything from arts and crafts shops to niche cafes and fashion boutiques, whilst the opening of Liverpool ONE, the UK’s biggest open air retail centre, has cemented the city’s status as an international shopping destination.
All of this is of course attractive to locals and prospective residents, which alongside affordable housing has given Liverpool serious long-term property appeal. In short, the property market is booming, making Liverpool one of the best (and cheapest) cities in the UK for developers with the right access to property development finance, to invest.
The Liverpool property market
The North West is renowned for some of the fastest growing property prices in the UK. Although Liverpool is still the UK’s cheapest major city for property, house prices have been on an upward trajectory for 20 years. According to the Land Registry, property prices increased by 36% from January 2010 to January 2021, and in the last three years alone, have shot up by 21.8%.
Savills’ latest UK house price predictions claim this is only going to continue, with average house prices in Liverpool set to rise further, by a mammoth 28.8% by 2025. This is astonishing predicted growth, and the highest in the UK. To put the numbers into perspective, this is more than double London’s forecasted growth over the same period, and 7.7% higher than the UK average.
A combination of the Stamp Duty holiday, and house hunters seeking more space at an affordable price since the pandemic hit, mean property in Liverpool is being snapped up so fast, there aren’t enough houses to keep up with the astronomical demand.
Bad news for buyers, with Zoopla reporting the total stock of homes available to buy is running at -24% below average levels, but a golden opportunity for property developers with the right property finance in place.
The Liverpool rental market
The rental market is equally as hot right now, providing another attractive draw for property developers to invest in the city. The average rental yield is 6.34% (July 2021), with the UK average sitting at 4.74%.
The trendy Baltic Triangle area (L1 postcode) has delivered rental yields of up to 8.1%, and L7, home to the Royal Liverpool University Hospital, has been known to deliver yields of 10%. The rental market is of course considerably helped along by the 70,000+ students who choose to study in the city, as well as young professionals, keen to take advantage of its plentiful cosmopolitan perks, and the affordable standard of living.
Best postcodes in Liverpool for rental yields
|Postcode||Average Rental Yield|
Source: Zoopla, 2021.
Significant developments in Liverpool
Liverpool2 is a £400m expansion of the existing port, aimed at creating one of Europe’s most modern container terminals, inevitably attracting more trade and creating thousands of jobs. Also set to bring more jobs to the city, and currently under construction is the Knowledge Quarter Liverpool, designed to create a central hub to attract and develop the life sciences, innovation and higher education sectors.
The Liverpool Waters scheme will play a huge part in the city’s continued regeneration and is anticipated to create 170,000 new jobs. The £5.5 billion mixed-use development will transform the city’s historic northern docks, stretching 2km along the River Mersey, mainly comprising office space and waterside apartments.
The city will also welcome the North West’s first eco-development in the next couple of years. ELEMENT is a low carbon mixed-use development designed to target the significant number of young professionals and postgraduate renters who have chosen to call the city home. Phase 1 is expected to complete in 2022 and phase 2 in 2023, with key apartment features including eco-lighting, eco-heaters, solar panels, extensive recycling initiatives and a system to collect rainwater for use with the plumbing.
Opportunity for property developers in Liverpool
After a string of delays, formal government approval for Everton’s £500m new stadium was finally granted in February 2021, whilst an £82.5m redevelopment of the club’s current home, Goodison Park, has been approved for a mixed-use project including residential, commercial and community facilities.
The new 52,888-seater stadium is expected to complete in 2024 ready for the football season, and it’s likely that the entire area around Bramley-Moore Dock will see a surge in demand for property, making it an attractive location for property developers to explore.
Developers looking to target the buy-to-let market should also consider the wider Merseyside area, which encompasses a total population of 1.4 million, with popular boroughs including Kensington, Edge Hill, Wavertree, Childwall, Aigburth, Mossley Hill and Allerton.
Property development in Liverpool hasn’t been without controversy in recent times, but it seems it’s nothing the housing market can’t handle. In fact, on the contrary property is booming, and it’s a great time to be a developer in one of the UK’s most exciting and popular cities, if you have access to the right development finance, which is one of the top barriers to success for SME developers.
How to finance property
development in Liverpool
Property development finance is a short-term loan used to fund construction or refurbishment projects. It nearly always makes sense to borrow, because using someone else’s cash is almost always cheaper than spending your own.
The development finance market can however be difficult to navigate. It’s overwhelming and there’s a lack of transparency so it’s also easy to miss an opportunity if you don’t know where to start.
This is where Brickflow can help. Brickflow is the first comparison site for development finance, meaning we bring the property finance market online, providing instant access to development loans.
We only work with lenders we know and trust, and with a few clicks you can invite them to make their best offer to you, meaning you’re empowered to choose the best finance for your project.
It’s the developers who can secure quality finance quickly, who will ultimately win the race for the most competitive development opportunities in Liverpool, and beyond.
To talk to us about development finance for a project in Liverpool, or elsewhere in the UK, give us a call on 020 3488 1674, or email firstname.lastname@example.org.
“While we’re all about the tech, we’re also about the human too. We’re happy to answer questions, explain the development loan process, or share tips & guidance along the way, if you need.”
Ian Humphreys Co-Founder & Head of Lending
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