Supply Of Homes In Liverpool City Centre Lowest For 10 Years

Liverpool’s property market has been through a turbulent time to say the least over the past 18 months or so. From corruption investigations to collapsed developments, the last thing the city needed was something like COVID. However, does a shortage of supply indicate some light at the end of the tunnel?

Property agency City Residential have recently released their quarterly report detailing the reasons for this stock shortage.

“The political challenges, issues, and embarrassment we have suffered over the last 12 months rumbles on. We may also just get a little “carried away” in believing that what we are experiencing is here for the long term. History would suggest otherwise!!” writes Alan Bevan, Managing Director at City Residential.

Why the shortage?

“There are a number of reasons why stock levels have plummeted in the way that they have. In sales the stamp duty holiday hugely increased the activity in the market which resulted in lower stock levels during the first half of the year that never truly recovered. With regards to lettings the market returned to something near normal with strong levels of student take up filling a large amount of the available stock together with tenants returning to the city in huge numbers.”

How has COVID influenced the market?

“Covid has had a huge influence on where we find ourselves today but not as you would expect. During 2020 we heard many commentators predict “the end of the cities” and highlighted how this would push tenants and buyers into the suburbs, which is exactly what happened. By doing this both house prices and rental prices have boomed in suburbia. It is almost near impossible to find something to rent in the suburbs and buying a house at a reasonable valuation isn’t far behind!”

What affect will this have on prices?

“Whichever way you look at it they are only going one way - upwards.

Sales prices have increased dramatically over the last 6-12 months and the reduced supply and increasing demand is only going to push prices higher. It is interesting to point out however, in comparison to the suburbs, the average prices of apartments in the city still appear to offer real good value for money even after the recent increase in prices.

A much greater affect may well be felt in the rental market. Liverpool is one of the few northern cities that has seen slow/steady rental growth rather than explosive growth over the last 3-5 years (certainly in comparison to the likes of Manchester and Birmingham). With almost no stock left in the market rental prices may well increase sharply over the coming 6-12 months, especially on renewal of tenancies/when an apartment becomes vacant.”

What does the future hold for the market?

Alan believes in the short term the market will remain “hot”, however he says “as increased supply (new schemes to rent and developments recovering from EWS1 issues) comes to the market we would expect some of the increase in prices/activity to moderate somewhat. Obviously, we can’t take it for granted that we have seen the back of Covid related issues, but it does appear that the city is back “firing on all cylinders!”