City Res: Market dominated by political decisions

The city centre residential market in Liverpool has been reasonably unremarkable in the first six months of the year, according to the latest quarterly report by local agents City Residential.

The report said the second quarter was dominated by the political agenda and sales, as well as prices, suffered as a result.

Alan Bevan, director of City Residential, added: "Whilst April was positive and some 20% up on last year, sales transactions, May was a particular tough month. The first half of the month we were all glued to the now infamous TV debates and the general election on 9 May. The second half of the month had us all trying to decide whether a coalition was a good or bad thing.

"If this wasn't enough we then had to "look forward" to the George Osborne's emergency cost cutting budget on the 22 June 2010. None of us expected the resultant measures that were announced to be positive and indeed it may take many months/years before the market feels the full affect of the measures announced.

"The anticipation ahead of the emergency budget was that Capital Gains Tax was to rise to the marginal rate of tax paid by the individual, hence 40% in many cases. The resultant rise to 28% was actually greeted with some relief even though it was a blow to many people with assets such as shares and property."

Bevan said that the general lettings market in the city continues to perform reasonably well "with a strong demand from tenants and a minimal increase in supply helping to maintain the status quo".

He added: "There are some new schemes for rental coming to the market either now or over the coming months which may affect this stability including Pall Mall, Kings Dock Mill and Mann Island. As we have seen with previous increases in supply this tends to encourage tenants to move from some of the older, less popular and poorly maintained schemes into the newer ones."

The report also claims students account for around 12,500 of the city centre population.

Bevan said: "The student sector is now probably the most important individual influence on the Liverpool city centre lettings market and if we have concerns then it is for the budgets/student numbers that the city is likely to see over the next few years."

The report is published by City Residential in association with PR agency Paver Smith.