The latest quarterly report from City Residential cites upcoming council elections, Brexit uncertainty and increasing pressure on landlords as factors in a “relatively quiet” start to 2019.
The ongoing lack of clarity around Brexit is high on the list, according to managing director Alan Bevan, who said: “Whilst previously we had noted that uncertainty around Brexit had not affected the market, we have seen some weakness during the first quarter in both sales and lettings as potential buyers, sellers, landlords and tenants all look for some certainty.
“The political climate in the city also sits high on the agenda of many developers and investors. With local elections due, a new mayoral election process starting soon for the election in 2020 and a relatively new Liverpool City Council chief executive in Tony Reeves, politics will continue to have a visible and important part to play in how the city develops over the coming years.”
What the market is seeing is a continued flight to quality, Bevan noted, with the progression of several build-to-rent schemes making Liverpool one of the more active regional BTR cities. ISG is on site for Brickland and Heitman at a 200-apaetment scheme in Blundell Street, while Moda Living’s The Lexington, funded by Apache, is due for completion in 2021 and will bring a further 304 dwellings.
Promenade Estates’ Cargo Building is now complete, while Plaza 1821, by Peel for Regenda, is a year from completion, and Invesco is funding the development of 391 apartments at Strand House. With its funder Moorfield having sold the completed Keel scheme to Barings in autumn 2018, Glenbrook is to work with the buyer on building out a second phase.
Several measures introduced and proposed nationally and locally are influencing the thoughts of landlords, said Bevan. These include increases in stamp duty and the gradual removal of tax relief on mortgage interest, while the banning of fees charged to tenants is scheduled to come into operation as of 1 June.
Bevan summed up: “The first three months of the year have been relatively quiet. The slowing pipeline, for both student and residential, that we have discussed previously continues to dominate discussions on supply and demand as does concerns for the future of fractional sales.
“There is no doubt that sales to overseas and UK investors of Liverpool developments on a fractional sales basis with ‘guaranteed yields’ is getting tighter as each month progresses.”
The full report can be downloaded here.