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Liverpool offers short-term yields of up to 27.2%

Buy-to-let landlords who own property in Liverpool could potentially achieve short-term rental yields of just over 27%, according to Portico Host.

The short-term letting agency has conducted research on short-term lets in Liverpool and Manchester and found that landlords in Fairfield, Liverpool, are achieving the best short-term let yields at 27.2%, compared to landlords of longer-term rentals, who can achieve a yield of 13.6% in the same area. 

The short-let yield is based on an occupancy rate of 50% of the year, which Portico Host report is typical for properties in this area due to seasonal demand.

Fairfield, located on the outskirts of Liverpool city centre, has become more popular and gentrified in recent years. 

A sizeable student population has attached itself to the area, attracted in part by the proximity of the city centre, the new shopping centre, along with a host of other amenities. 

Of the ten best performing locations for short term let yields, the top eight are in Liverpool postcodes: L6, L4 and L7. In Manchester, the highest short let yields can be found in Hulme (M15) at 15.1%.

Rachel Dickman, regional manager, Portico Host, said: “It isn't surprising to find that the properties that are achieving the greatest returns are those that are situated in areas surrounding Liverpool and Manchester city centres. These places typically have excellent transport links, proximity to popular tourist attractions, employment hubs, and good restaurants and cafes.

“Liverpool is becoming increasingly popular on the tourist trail, with 1.34 million people visiting the city in 2018, including business travellers, students and young professionals.

“It's also continuing to host and attract major sporting events, such as the Netball World Cup 2019 which recently took place in the M&S Bank Arena. These factors are resulting in a growing number of people wanting to stay in short-let properties in Liverpool, and the increased demand for this type of accommodation is underpinning the rents that can be achieved.”

Best performing locations for short term let yields in Liverpool and Manchester

Area

Short-let Yield (%)

Short-let Gross Income

Rental Yield (%)

Rental Gross Income

Avg. House Price

 

Postcode

Fairfield, Liverpool

27.2%

£32,883

13.6%

£16,716

£126,779

L6

Walton, Liverpool

25.5%

£18,493

7.9%

£5,700

£72,317

L4

Kensington, Liverpool

24.2%

£27,405

9.8%

£12,260

£119,150

L7

Kirkdale, Liverpool

23.9%

£15,930

8.5%

£5,786

£73,564

L4

Anfield, Liverpool

22.7%

£23,766

9.6%

£10,457

£102,772

L6, L4

Toxteth, Liverpool

20.9%

£13,779

9.0%

£5,775

£74,250

L8

Orrell Park, Liverpool

17.5%

£13,779

7.5%

£6,360

£91,500

L9

Vauxhall, Liverpool

15.5%

£20,885

6.8%

£ 20,885

£ 139,061

L2, L3, L5

Hulme, Manchester

15.1%

£20,158

6.9%

£9,080

£133,333

M15, M16

Levenshulme, Manchester

13.6%

£19,385

6.2%

£8,700

£140,000

M19

The strengthening of its economy and infrastructure, along with its growing student and young professional population, and lower property prices, make investment in places such as Fairfield, Kensington, Walton and Anfield a popular choice for investors. 

The same can be said for Manchester, which has one of the fastest growing populations outside of London, and alongside Liverpool has seen a huge influx in tourists and visitors, as improved transport links have made it easier to visit. In 2018, Manchester hosted 4.9 million visitors.

Hulme, where Manchester's highest short-let yields can be found, has seen more than £400m worth of investment into regenerating the area in recent years. 

Interestingly, there are currently 10,200 active listings in the North West on Airbnb, according to AirBnb's latest insight report. These short term lets are not just popular with holidaymakers, but also those who are between properties and are seeking flexibility with no overheads.

On the flip side, short-let properties offer homeowners or landlords the opportunity to make extra income from their properties, especially during void periods between student lets or long-term rentals.

Fiona Veitch, Portico's marketing director, commented: “It's not just high yields that investors in Liverpool and Manchester can benefit from. Despite property price growth in London plateauing, it's predicted that the north-west will boast the strongest levels of capital appreciation in the UK over the next five years.

“Using Land Registry data, Portico found that the average property price in Liverpool has increased by 19.34% over the last five years, rising from £108,267 in June 2013 to £129,562 in June 2018. In Manchester, the average property price has increased by a staggering 47.76% - from £119,951 to £177,243 in the same period.

“Reports indicate that the north-west will see property price increases of at least 21.6% over the next five years – boosted by supportive government policy, regeneration plans and a surge of companies relocating from London to up north to lower costs.”

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