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New build property investment returns: Liverpool V’s Manchester V’s Birkenhead.

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

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

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

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.

conway-st-to-tunnel

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.

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What is Wirral Waters?

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.

 

 

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Wirral best place to live in England

At last, the rest of the UK now acknowledge what we have been saying for years – Wirral is a great place to live, work and bring up a family. With 3 spots in the top 10 in England we should be shouting more about the benefits of the area and not listening to the (mostly) southern types denigrating our peninsula.

Bebington in Merseyside is the most desirable place to live in England, according to a Royal Mail survey.

Royal Mail said the study, conducted by the Centre for Economic and Business Research, looked at green spaces, affordable housing and commuting times.

Seven northern locations, including Dalton-in-Furness in Cumbria, were in the top 10 in England, the survey said.

Bebington residents, who live near the River Mersey and Port Sunlight model village, “enjoyed the ideal balance” of living close to their workplace, good schools and high employment, according to the report.

The most desirable postcodes according to nation

England
◾CH63 – Bebington, Wirral
◾IP5 – Kesgrave, Ipswich
◾LA15 – Dalton-in-Furness, Cumbria
◾NR8 – Taverham, Norfolk
◾FY6 – Poulton-Le-Fylde, Blackpool
◾DT1 – Dorchester, West Dorset
◾WA1 – Warrington, Cheshire
◾CH62 – Eastham, Wirral
◾CH45 – Wallasey, Merseyside
◾LA13 – Barrow-in-Furness, Cumbria