Many of our clients are from out of area and want advice on the best areas to invest in the Wirral. When investors come to our offices for the first time we sit them down in front of the large Wirral wall map and discuss what the area is like, highlighting the areas that are probably of most interest.
Not everyone can make it to us in Hamilton Square, so for those investors from further afield here are the main highlights of my regular introduction to investing in the Wirral.
The peninsula is an oblong shape, roughly 15 miles long by 7 miles wide, bisected by the M53 motorway which runs north to south through the middle of the area. The major towns are Birkenhead and Wallasey to the east and Heswall and West Kirby to the west.
Although a bit of a generalisation, the east tends to be older, higher density and lower value properties whilst the west has larger higher value property. To get a higher yield from your investment property you should be looking in the east, and this is where we will be concentrating on this post.
Major areas of interest:
Central Birkenhead, around Laird St and Park Road North.
North Birkenhead (locals call it The North End), but selective parts only.
Tranmere, especially the area between the parks.
Rockferry and parts of New Ferry.
East of Wallasey and Liscard, but not Seacombe.
New Brighton, especially the south and older properties in the east.
Parts of the Noctorum, Beechwood and Woodchurch estates.
The Wirral is unusual in that it is fairly common to have some very high value property enclaves abutting run down areas and particularly difficult streets. Local knowledge is key to ensure you buy in the right areas to maximise your rent and avoid the known problem areas.
Contact Andrew@hamiltonsquareestates.com for more information
We have all heard a lot over the past months about the death of new build buy to let investment in the UK. Undoubtedly the second homes SDLT surcharge has caused investors to carefully consider the maths for new purchases. Likewise, the upcoming changes to the taxation of mortgage interest relief will cause many landlords with existing portfolios to reconsider their position. So with these changes already known, why is BTL still considered not just a viable, but a desirable investment?
My area of interest is the North West of England, particularly the areas around Manchester, Leeds and Merseyside. We presented a couple of investment seminars at this year’s Homeowner and Property Investor Show in Docklands Arena. They were standing room only, so we know there is plenty of interest from out of (our) area investors wanting to buy here. We also run tours for investors around the local area to highlight the vast range of projects currently underway (see Liverpool and Wirral Waters, the new Liverpool 2 port, China Town, Salford Quays, et al in my previous posts). We have around 2 groups a week here from London for our own Grand Tour – think Clarkson, Hammond and May but with fewer car crashes and more coffee.
The most regularly asked question is about the comparative returns available on new build between Manchester, Liverpool and Wirral, and what are the prospects for the 3 areas.
My own view is that they all have their own merits, depending on your aims. There is no space on this short post to go into too much detail, but in brief:
Manchester offers the widest range of existing high quality provision. The market for better quality apartments is more mature than the other areas, and the job prospects for the city are very good. Unfortunately this is reflected in the prices, with current new build 1 bed flats achieving around £2,100 per M2. Prices start around £110,000 per unit for mid-range developments on the periphery of the city centre. Rents are high compared to the wider region, but so are prices. Despite this gross yields are around 5.5%, with net yields of 4.2% in better quality new-build sites.
Liverpool has seen very rapid development, in the past 5 years particularly, driven by the rapidly improving local economy and some major infrastructure investments. Prices are still far below Manchester levels but rising quickly, as are rental rates – 1 bed flats close to the river regularly go for £685 pcm. If you are looking for an absolute bargain you are probably 18 months too late, although there are still some very good buys available if you know where to look. Prices range from £1,500 – £2,000 per M2, with the prices rising the closer you get to the River Mersey, particularly in the L1, L4 and L69 postcodes. Gross yields are averaging at 7%, or 5.6% net.
Wirral is still the wild west for new build investors. Until recently there was not much good quality stock to buy into, although things are now changing. A number of schemes are completing and there are other interesting developments in the pipeline around the Birkenhead and West Kirby areas in particular. The area benefits from being only 10 minutes by train from Liverpool centre. We see more people moving from Liverpool to Wirral to take advantage of the lower prices whilst still retaining access to the big city experience. Good quality stock goes for around £1,400 per M2. Gross yields are holding at 8.5%, Net around the 7.2% level.
So, who comes out top? For range of options Manchester is difficult to beat. If your target investment is only city centres then Liverpool is a very good bet, especially the area south of the Albert Dock and into the Baltic Triangle.
However, our winner is Birkenhead. Our view is that east Wirral in particular offers the best opportunity for price increases in the next 1 – 5 years, coming off its current low (some would say undervalued) base.
With low but rising prices and high yields, coupled with the 10 minute transit time to Liverpool city centre for both work and leisure, Birkenhead is our top tip for property investors in the region.
Yet more about improvements to the local economy, this time the Maritime Hub Innovation Centre at Four Bridges.
I have blogged about this in past weeks but now have a good video clip that explains more.
I drive past this site every day and can see what is happening. Things are starting to come together and this new training and knowledge centre will no doubt become an important driver for the higher tech / higher quality jobs that are the future of any major economy.
Peel Holdings, who own the site, have a strategy to develop the Mersey basin. Both local and national government have latched on to the possibilities here and there actually seems to be some joined up thinking going on. The possibilities to redesign the city region’s economy are immense. This Maritime Hub will no doubt play an important part in supplying the training and support needed to achieve this.
A client has just been to view 3 of our investment properties currently on the market. They are all in an area close to East Float in Birkenhead. After showing her the houses we chatted about what was happening locally and I was surprised to hear she was unaware of Wirral Waters. So what is Wirral Waters and how will it affect you?
Wirral Waters is Peel Holdings plan to develop the Wirral side of the Mersey into an international trade and development area. Allied to that are plans to also build a technology and innovation centre, with the whole thing centred around the East and West Float areas between Wallasey and Birkenhead. It will be Europe’s biggest building site during construction and will transform the Wirral when complete.
I have attached a video link which explains things in slightly more detail, although there is much more about Wirral Waters available on-line for those who want to know more.
Latest data on house price changes in Wirral make interesting reading. The headline figure is that prices are up an average £8,653 or 4.21% across the area. This is slightly below the national average of a 5.2% increase.
This shows an average sale price of £199,017 for Wirral, with 2,035 sales taking place in our area within the past 12 months. Property prices are now higher than before the property crash of 2008 – 2011.
Within Wirral the usual areas remain popular, with Heswall and West Kirby doing well according to our friends at Zoopla. Less expected is the resurgence of values within the Noctorum area. Vyner Road South has done particularly well in the past year, but so has the whole area between Noctorum Lane to West Rd. Clatterbridge has out performed the local market and looks set to continue the trend, with some good quality properties coming to market.
The most surprising data related to parts of New Brighton. The area around Warren Drive has seen substantial activity and has done very well. There are a number of large, well appointed houses and there seems to be an increased interest in the market. It is about time that all the fantastic improvements in New Brighton are reflected in the local house prices. I am sure this trend will continue.
My tips for the coming months? Upton and New Brighton for owner occupiers.
For investors, however, things are very different. Demand remains high for single bed flats, and for 2 and 3 bed houses. Rents are stable in Wirral despite reports of a slowing trend in other part of UK.
The Council’s selective licencing scheme is about to come into effect. The expectation is that it will drive down prices in the affected areas for a few years, as more properties are “forced” on to the market. We should then expect prices to rise again, fairly sharply I suspect, as the benefits of the scheme become manifest. Avoid buying in those areas for now.
Central Birkenhead, Tranmere and Rock Ferry continue to offer some of the best yields for investors. That’s where my money is going.
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