A dip in overseas students, doubts around cladding and “carnage” around short-term lets have all been prominent characteristics of an unpredictable central market, agent City Residential has said.
In the agency’s Q3 2020 Liverpool Residential Update report, managing director Alan Bevan said that the months between May and October had been its most successful selling period for more than ten years, highlighting pent-up demand and a retention of confidence in city living.
Bevan said that although the announcement in July of a stamp duty holiday had been a factor, other elements had played a part.
He said: “There is plenty of cash floating round the market and given the volatility of the stock market, property still appeals to many people. There are plenty of investors looking to snap up any bargains as well.
“Contrary to popular opinion there are also plenty of buyers who don’t agree that ‘city centres are finished’ like many doom merchants believe, especially when the see the value the city offers in comparison to the booming prices of the better suburbs.”
Bevan said that the lettings market was “difficult to predict”. The report notes that although most students have returned to the city, some overseas students have opted not to – opening up space at the type of high end apartment schemes favoured by this market segment, such as Mann Island and One Park West.
Another factor in supply returning to the lettings sector is the conversion of Airbnb “party flats” to the conventional market. Liverpool City Council has sought to impose restrictions on the market, but Bevan suggests the market may have been reaching saturation level even before Covid caused “carnage” in the market.
He told Place North West: “There were signs it was heading that way, and the council’s view on this is very clear too. Some are converting to standard lets, although it’s not always straightforward and any such apartment owners have missed the boat for this autumn letting season.”
Rumbling along as a factor holding back people looking to buy or sell is the industry’s struggles to get to grips with legislation introduced in the wake of the Grenfell disaster.
City Residential said: “The market continues to suffer from the fall out of the Grenfell Tower/cladding issues with many apartment blocks currently unsaleable or unmortgageable until the cladding is renewed. EWS1 (external wall safety) forms have become extremely difficult to obtain.”
Bevan said that there is a feeling that lenders are exercising great caution in the market, meaning any building even with a small amount of cladding in its make-up is currently in limbo in lending terms. He suggested that around 30% of city centre buildings are impacted at present, with only around half of those actually likely to require any sort of attention or alternation.
The full report is available online.