After years of focusing on London and the South, property investors are increasingly looking towards the North of England for better value and future growth. And amongst the major northern cities, there are two which stand out: Liverpool and Manchester.
If you’d like to learn more about the latter, we suggest reading our buy-to-let investment guide for Manchester.
But if you’d like to learn more about property investment in Liverpool, then read on. In this article, we’ll use data to explore the best buy-to-let areas in Merseyside, including the main city of Liverpool and the four surrounding boroughs of Knowsley, St Helens, Sefton, and Wirral.
There’s good reason to be interested in Liverpool’s buy-to-let potential. After it was named the European Capital of Culture in 2008, the city has enjoyed a period of significant growth and progress.
Many areas are undergoing extensive regeneration. Public and private organisations are investing billions each year into the city’s businesses, housing, and infrastructure. The city’s lively culture, sporting prowess, and music history make it a fun place to live and visit, with the population growing (especially amongst 22 – 29-year-olds) and a tourism industry on the post-pandemic recovery path.
This means that demand for property in the city is growing, particularly for rental properties in the most central areas. Both young professionals and students want to live in the centre for easy access to jobs and education. And tourists want to stay centrally when they visit so they can be close to the city’s most famous attractions.
Plus, the average sale price of a property in Liverpool is lower than in other hotspots around the country. As of March 2024, it’s just over £206,500 according to Zoopla, compared to £248,500 in neighbouring Manchester.
Altogether, this creates the perfect storm for a property investor. Property is more affordable (and therefore has plenty of room to grow), yet rental demand is high (pushing rental prices up). As a result, an investor stands to achieve excellent rental yields.
So, without further ado, let’s take a look at the data.
To determine the best spots we’ll use two pieces of data: average rental yields and capital appreciation. Rental yields will help us understand the scale of return an investor can expect from a buy-to-let property, whilst capital appreciation will show the long-term value of holding a property.
Top 10 Postcodes In Merseyside By Rental Yield
| Postcode | Avg Rent (pm) | Avg Yield |
|---|---|---|
| L4 | £761 | 7.80% |
| L20 | £757 | 7.50% |
| L13 | £793 | 6.90% |
| L5 | £737 | 6.70% |
| L9 | £851 | 6.70% |
| CH41 | £694 | 6.60% |
| L8 | £765 | 6.20% |
| L2 | £762 | 6.20% |
| L36 | £1,012 | 6.10% |
| L3 | £911 | 6.00% |
This table shows where the highest rental yields, a cornerstone of any buy-to-let investment, can be achieved across Merseyside.
The highest average rental yields in the city are found in the L4 postcode district, Anfield. The area contains the famous stadiums of Premier League football clubs, Liverpool and Everton, which are separated by the expansive Stanley Park.
Property in the area is valued lower than many other postcodes in Liverpool (just £117,170), which seems to be driving the higher rental yields.
The rest of the top 10 is largely dominated by postcodes within the City of Liverpool, apart from CH41 in sixth place, covering Birkenhead. The area sits on the opposite side of the River Mersey from the city centre, connected by the Kingsway and Queensway Tunnels. Similar to L4, its yield performance is likely helped by lower-than-average property values, with the average property worth £125,440.
The city centre does particularly well, with both L2 and L3 ranking highly. The city centre’s docks fell into disrepair in the latter part of the 20th Century, but regeneration since the turn of the millennium, along with a 30-year, £5.5bn project called Liverpool Waters, has helped reinvigorate the area. Luxury, waterside apartments are now highly sought-after.
Top 10 Postcodes In Merseyside By Property Value Growth
| Postcode | Avg Asking Price | 5yr Value Growth |
|---|---|---|
| L5 | £132,160 | 75% |
| L6 | £135,433 | 40% |
| L1 | £148,903 | 38% |
| L4 | £117,170 | 36% |
| L30 | £157,161 | 36% |
| L16 | £316,639 | 33% |
| L17 | £253,008 | 30% |
| CH48 | £461,078 | 29% |
| CH61 | £283,080 | 29% |
| L27 | £150,230 | 28% |
This table shows the areas of the city that have seen the highest growth in property values over the past five years.
The top-performing postcode, with an astounding 75% growth in property values over the past five years is L5 (Vauxhall and Everton). Regeneration efforts in the area, along with modern residential apartment blocks, have aided growth – Everton Football Club’s new stadium is currently under construction on Bramley Dock, for instance.
Nowhere else in Merseyside comes close, with L6 a distant second place, albeit with a strong 40% increase in values.
L1, right in the middle of the city centre, has seen a 38% increase in value over the past five years. It’s a stunning level of growth that has been aided by the regeneration and development of some of the city’s busiest and most important areas – from Albert Docks and the Baltic Triangle, stretching out to St George’s Quarter and the Knowledge Quarter.
Again, we see representation from CH postcodes in this table, with CH48 and CH61 in 8th and 9th. These postcodes are part of the Wirral Peninsula, one of the most affluent and highly sought-after areas in Merseyside, located just across the River Mersey from Liverpool city centre. CH48 covers West Kirby, while CH61 contains villages such as Irby, Pensy, and Thingwall.
But, importantly for any property investor, many of the central postcodes that achieved strong yields also appear in this table – the likes of L1, L4, L5, and L6 all display excellent yields and strong growth in values, yet are still available at entry-level prices. Savvy investors should be focusing on these areas, given growth is set to continue.
So, Where Are the Best Buy-to-Let Areas in Liverpool?
The best buy-to-let properties offer a well-balanced mix of rental yields and growth in property value (capital appreciation).
So we’ve taken the data from the tables above and combined it. The scoring system is fairly simple. There are 55 postcodes within our dataset. The postcode with the highest rental yield receives 55 points. The second-best receives 54 points. And so on.
The same is applied to the five-year growth values. The postcode with the highest growth receives 55 points. The second-best receives 54 points. And so on.
We’ll also weigh the scores. Rental yield scores are multiplied by three, whilst capital appreciation scores are not. This emphasises yield, which takes slight precedence for buy-to-let investors.
Then, the points have been added together to calculate a final score, by which the results are ordered. Here are the results:
| Postcode | Avg Yield | Yield Score | 5yr Value Growth | Growth Score | Combined Score |
|---|---|---|---|---|---|
| L4 | 7.80% | 165 | 36% | 52 | 217 |
| L5 | 6.70% | 156 | 75% | 55 | 211 |
| L13 | 6.90% | 159 | 25% | 42 | 201 |
| L20 | 7.50% | 162 | 22% | 35 | 197 |
| L1 | 5.80% | 135 | 38% | 53 | 188 |
| L6 | 5.50% | 132 | 40% | 54 | 186 |
| L8 | 6.20% | 144 | 20% | 31 | 175 |
| CH41 | 6.60% | 150 | 17% | 23 | 173 |
| L9 | 6.70% | 153 | 13% | 13 | 166 |
| CH44 | 4.70% | 120 | 26% | 43 | 163 |
So there you have it. The best buy-to-let area in Liverpool is L4, which covers Anfield, Goodison Park, and Walton. The postcode generates an excellent average rental yield of 7.8% which tips the scales in its favour. Meanwhile, purchase prices have increased by 36% over the past five years. This is nowhere near the level of growth seen in second-placed L5 (+75%), but it is well above the regional average of 20%.
For those seeking something out of the city centre, Bootle’s L20, in fourth place, is worth considering. In 2013, This Is Money named Bootle a “buy to let boomtown”, with it proving extremely popular with renters.
The results also suggest buy-to-let investors stand to benefit greatly from Liverpool’s central areas, with the L1 postcode taking fifth. L1 is home to the Baltic Triangle, named by The Times as the coolest place to live in the UK. The area is filled with high-end apartments, independent shops, restaurants, bars, and creative office spaces.
A little further southwards, but still part of the inner city, areas like Dingle and Toxteth in L8 are enjoying a revival – so it’s no surprise to see the postcode make the top 10. These areas had less than desirable reputations for a long time, but that’s all changing thanks to major regeneration projects. It’s densely populated, with a mix of Victorian-era terraces and larger family houses (that are now being broken up into individual flats) which are attractive to both students and young professionals.
Why Liverpool?
Not yet convinced about Liverpool?
Then let us explain why you should be considering adding this city to your property portfolio.
Lower Property Prices
The average property price in Liverpool is £206,567 (according to Zoopla, as of March 2024). Interestingly, this is much lower than other major cities, which makes it an attractive option for investors.
Using Zoopla’s data, we can easily see Liverpool’s lower average value in comparison to the rest of the UK:
| Area | Average Value |
|---|---|
| Liverpool | £206,567 |
| UK as a whole | £336,280 |
| Birmingham | £250,018 |
| Bristol | £392,848 |
| Cardiff | £286,328 |
| Edinburgh | £348,802 |
| Leeds | £249,576 |
| London | £735,195 |
| Manchester | £248,539 |
| Sheffield | £244,941 |
In short, Liverpool is more accessible to investors with lower budgets. It also means better value for money, as somebody could purchase three properties in Liverpool for the same price as one in London. This might appeal to those aiming to build a multi-property portfolio.
And secondly, it means better yields. Liverpool has consistently generated some of the strongest rental yields in the country thanks to affordable property prices and high rental demand.
Growing Property Market
With lower property prices in comparison to other cities, there’s plenty of room for price growth in Liverpool. And with huge regeneration projects across the city, mass public and private investment, and a thriving job market, that’s exactly what’s happening.
In December 2023, The Telegraph named the city as one of the top 10 in the UK for house price growth. Meanwhile, Zoopla published research showing the city has the fastest-moving market in the country, with the average property selling in just 17 days.
Plus, there’s plenty of room for further growth. Savill’s residential property forecast predicts the North West will witness a 20.2% increase in average property values over the next five years.
Thousands Of Students
Liverpool has three universities: The University of Liverpool, Liverpool John Moores University, and Liverpool Hope University.
The pedigree of a university is a major pull factor for prospective students. Liverpool enjoys an excellent reputation in this regard. The University of Liverpool has nine Nobel Prize winners amongst its alumni, whilst it was also a founding member of the Russell Group of Universities in 1994. This is an exclusive group of world-class, research-focused universities in the UK, which are popular choices for students owing to their excellent teaching standards and post-university job prospects.
Overall, there are over 60,000 students spread across the three universities according to HESA. Fascinatingly, for property investors, half of this population is reliant on Purpose Built Student Accommodation (PBSA) or private rentals (e.g. student HMOs).
But why is this good for investors?
A large student population is a major plus for any property investor. In general, student property achieves excellent rental yields as landlords can either fill properties with multiple paying occupants, or they can focus on the higher-end of the market – international students, for example, are often willing to pay for more luxurious spaces.
If you’d like to learn more, read our guide to student property investment.
Young Professionals
The number of young professionals living in Liverpool is rising quickly. The Liverpool Echo reported that, between 2001 and 2011, the number of 22-29-year-olds living in the city centre nearly quadrupled.
This has likely continued, as the young professional population is being fed by the city’s universities. The graduate retention rate is one of the highest in the UK (joint 8th at 38% with Newcastle according to Knight Frank). Plus, there’s a healthy mix of new graduates from other sources, such as those returning to the city after leaving for university – this group makes up roughly 20% of Liverpool’s graduate workforce according to a Centre for Cities report from 2017.
Furthermore, with the London housing and rental market becoming increasingly unaffordable, a rising number are moving away from the capital to alternatives in the north.
This should be music to the ears of a property investor. Young professionals are the ideal tenant demographic – they earn solid salaries, are willing to pay extra for quality and location, and often need to rent for several years while they save for a mortgage deposit.
Booming Tourism
Liverpool’s visitor economy is worth £4.9bn each year, thanks to its status as a major tourist attraction – it’s the 5th most visited city in the UK.
Tourism is driven by several factors, such as:
- Sport: The city is home to two Premier League football clubs, Liverpool FC and Everton FC. Due to the international appeal of the Premier League and the historical success of both teams, fans from all over the world visit every weekend to attend games. Plus, nearby Aintree Racecourse hosts the hugely popular Grand National horse race.
- Art & Culture: Liverpool has the highest number of museums, parks, listed buildings, and galleries outside of London.
- Music: Forever known as the birthplace of The Beatles, Liverpool has always had a rich association with musical pedigree. The Beatles, in particular, bring in thousands of tourists, with their history captured at attractions like the Cavern Club.
- Nightlife: Liverpool’s famous nightlife is another major draw. Several areas within the city centre are dedicated to bars, pubs, and clubs of all varieties.
But what does this mean for a buy-to-let investor in Liverpool?
Tourists need places to stay. And the demand for high-quality serviced accommodation (such as the type of properties typically found on Airbnb) has opened up an entirely new investment opportunity.
With a short-term letting model, property owners can let their properties to visitors at a higher price per night than a long-term renter would be willing to pay, which can result in exceptional rental yields.
Liverpool vs Manchester
Manchester and Liverpool have enjoyed a similar trajectory over the past few decades.
Both witnessed incredible growth during the Industrial Revolution, owing largely to the Manchester Ship Canal, which connected Manchester’s factories with the rest of the world via Liverpool’s port.
But following the end of the First World War, an economic slump hit the UK. Industrial cities in the north were heavily impacted, leading to mass unemployment and poverty. It has taken decades to fully recover, with several setbacks along the way.
Since the 1990s, both Liverpool and Manchester have witnessed mass urban regeneration and widespread public and private investment. The cities have, in effect, been completely transformed and the last few years, in particular, represent a period of incredible success and growth.
But which is better for a property investor?
We consider the question in our blog post: Is it better to invest in Manchester or Liverpool?
But if you’re after a quick summary, the main argument for Liverpool is that property in the city is more affordable than in Manchester, making it more accessible to investors on a budget. It also means huge growth potential and excellent yields.
Meanwhile, the main argument for Manchester is that, historically, it has delivered better property and rental value growth – and all forecasts suggest this is set to continue.
Summary
Buy-to-let in Liverpool, especially in the most central areas, should be a strong consideration for any investor. Generally, the property prices are not as high as those found in Manchester, making the city a more affordable location – perfect for entry-level buyers.
Of course, this does mean rental values aren’t as high either, but Liverpool is certainly on the same trajectory as its neighbour and old rival.
If you’re interested in finding out more and purchasing a buy-to-let property in Liverpool, please get in touch with our team using the form below. We’ve helped hundreds of investors, from all around the world, find the right property for their requirements, budgets and goals. We’re a property investment company operating across Liverpool and the North of England.
We can help with every step of the investment process. Our expertise, due diligence, and connections mean we can source excellent opportunities. We don’t charge a fee for our service and we’re members of the Property Ombudsman.
About this data
The data in this article comes from PropertyData. It is an accurate representation of the Merseyside property market as of March 2024. We’ll update this report next year, in 2025, with fresh data.
