City Residential: Liverpool investors continue to buy despite tax fears

The quarterly report compiled by City Residential said that despite “headwinds” over stamp duty and the future removal of tax relief on interest, investors and landlords are continuing to buy apartments in Liverpool.

However, the report goes on to say that the tightening of required rental interest cover by mortgage lenders will impact landlords with high levels of gearing.

In addition, predicted managing director Alan Bevan, the proposed abolition of tenant fees will “shock” the market, although he added that it is too early to say how this will play out.

Sales

• Prices up by 1.3% over the quarter, with growth mainly at the upper end of the market
• Continued increase in interest in better quality, more expensive properties from investors and buyers coming into the city
• Local investors continue focus on lower end product where the yields are higher
• Stamp duty changes have affected the market, but not as much as feared

Development

• Growth in tower proposals, especially around Princes Dock, Leeds Street and Pall Mall area
• Build completions expected in next quarter at Orleans House, Chancery House and 60 Old Hall Street
• Eighteen schemes currently for sale or under construction
• 1,519 units under construction due for 2017 delivery
• 1,797 units under construction due for 2018 delivery

Lettings

• Strong September post-Brexit activity continued, with October and November up year-o-year.
• Marginal rise in rents during the quarter, most notably at top end of the market
• New schemes with all bills included proving popular, especially with students

PRS

• 240 units built, 408 under construction, 1,728 with planning approved
• Anwyl’s 336-unit scheme progressed through planning
• Strand House obtained planning permission in December

Student accommodation

• 4,020 units under construction, with 1,724 to be delivered in 2017
• 5,090 units with planning approved

Bevan concluded: “While 2016 may go down as one of the most memorable in recent history, the residential market in the city has moved on steadily and continues to defy those commentators that have been suggesting there is bad news ahead.

“While the luxury market in London has taken a large hit – more stamp duty-related than Brexit-related – there appears to be a large and growing interest in the regional cities such as Liverpool, Leeds and Manchester.”

The full report can be downloaded here.