Overseas buyers and large institutional investors are set to send residential property values and rents soaring in Liverpool city centre over the next five years.
That’s according to Merseyside property expert Alan Bevan who believes the current city centre market is seriously undervalued.
Mr Bevan, boss of leading residential property agency, City Residential, revealed his research into the local market at the MIPIM property and investment expo in Cannes.
He joined a 30-strong Merseyside private sector delegation which had travelled to the French Riviera to sell the city region.
Mr Bevan produced a chart showing average residential values in 10 UK cities. The City of London came out on top at a whopping £1,250 per sq ft.
The rest of London (£850) came next followed by Edinburgh (£320), Bristol (£300), Glasgow (£290), Leeds (£255), Manchester (£260) and Birmingham (£210).
At number nine was Liverpool at £205 per sq ft - just beating Newcastle at £200 per sq ft.
Mr Bevan said: “Either those other cities are overvalued - which I don’t think they are - or Liverpool is undervalued.”
He added that up until recently investors had been scared off by misconceptions about Liverpool - such as there being an oversupply of city centre apartments, that prices were not growing and that the city was not safe - all of which he says are untrue.
Mr Bevan showed another graph which revealed that although the number of local buyers of city centre properties was falling, the number of national and overseas buyers was growing.
His research projected that they would, combined, outnumber local buyers by 2020.
He also said that Private Rented Sector (PRS) investors were now putting their cash into the city centre market.
A PRS investment is one made by a major institution such as a large pension fund.
“The first two PRS schemes are under construction and are due for completion in 2015 and 2016,” added Mr Bevan.
“I will come back in 2020 and I will stand here and tell you that we have 10 PRS schemes in Liverpool city centre - that is guaranteed.”
Mr Bevan explained that the key to attracting investors is rental returns and an expected population boom in the city centre over the next five years will push up demand and, therefore, rents.
He said: “I’ll be amazed if by 2019 we do not have 50,000 people living in our city centre. That will be a five-fold increase since 2000.”
Projecting the average monthly rent for a two-bed apartment to surpass £900 by 2020, he added: “If you buy at this current capital value and you get this rental growth then your investment is going to be the best in the UK.”
Tony McDonough, 18/03/2015, www.liverpoolecho.co.uk