Today, demand for purpose-built student accommodation (PBSA) in the UK vastly outweighs supply, with an expected shortfall of around 450,000 beds by 2025, according to recent data from StuRents.
In Liverpool – one of the UK’s most popular student destinations – this is no different, which presents a unique opportunity for investors to enter a lucrative market by purchasing high-earning, easily tenanted properties.
With a steadily rising student population of around 60,000, Liverpool is home to three top universities that are among the most popular 3rd-level institutions for both domestic and international students in the UK.
Therefore, when it comes to student property investment, Liverpool should be one of the top locations in the mind of any investor.
With some of the UK’s most affordable investment properties and highest rental yields, this city, situated in the thriving North West, is quickly becoming one of the country’s most lucrative property investment hubs.
Currently, Liverpool student investment property can be purchased for under £90K right in the heart of the city in brand new developments like The Exchange Liverpool.
Generating rental yields of up to 7%, a better value for money investment is hard to come by and when coupled with a student population that is on a steady rise, now is an excellent time to invest in this type of property.
If this is an area that interests you, keep scrolling to delve a little deeper into the main reasons to consider student property investment Liverpool in 2023.
In This Blog:
Although the benefits of making a student property investment in Liverpool are plentiful, here we’ve highlighted what we think are the key factors driving this lucrative PBSA market and why 2023 may be the opportune time to invest!
In the end, every financial endeavour circles back to affordability and property investment is no different.
In general, Liverpool is among the most affordable places to invest in UK property, and in recent years has boasted some of the country’s highest rental returns.
According to the latest house price index, the average Liverpool property is valued at £182,625 – which sits below the UK average by a sizeable £107,000.
Notably, in terms of student investment property, Liverpool is home to a number of central developments like The Exchange, where high-end apartments can be purchased for just £89,950.
This lower entry point allows investors to get more for their money and opens up the option of buying clusters of student rooms for a similar price or less than a regular buy to let property.
Allowing investors to significantly increase the value of an investment, this can easily become one of the most profitable, secure and cost-effective buy to let investment strategies.
Additionally, key residential areas like Liverpool One and the thriving Baltic Triangle have been generating average rental yields of up to 8.3% since the beginning of 2023, making Liverpool a highly lucrative area of investment.
This sits comfortably above the UK average of 4.9% and from an investment perspective, is one of the main reasons Liverpool now possesses one of the UK’s strongest buy to let property markets.
Along with the increasing number of students moving to Liverpool, both property and rental prices are set to experience significant growth in the coming years.
According to market experts Savills, property prices across the entire North West will increase by an average of 11.7% between now and 2027 – the highest rate of regional growth in the UK.
Understandably, Liverpool is central to the sustained growth of the buy to let market in the North West, with JLL’s latest residential market forecast predicting a 14.5% increase in the value of property across the city in just the next four years.
Average rents are also set to increase across Liverpool in the coming years with a rental value growth rate of 10% between now and 2026 predicted in the same JLL report.
With demand for student accommodation in Liverpool showing no sign of slowing down and supply simply not keeping up, this presents an excellent opportunity to invest in Liverpool student property.
Importantly, in 2023, due to a number of external factors including the ongoing cost of living crisis, property prices are expected to drop briefly across the UK by an average of around 10% before increasing steadily over the coming years.
This presents a rare window of opportunity for investors who purchase a buy to let property this year, as they will see the value of their investment grow significantly towards the latter half of the decade.
So, whether you decide to go down the capital appreciation route and sell a property for a significant profit, or hold onto it for the rental income, the value of buy to let property and in particular, Liverpool student property investments, will continue to grow in the near future.
Luckily for investors, Liverpool’s famed reputation as one of the UK’s friendliest cities is one that traverses the globe and has been key to attracting increasing numbers of international students in recent years.
This, along with the city’s rich culture and world-class universities, has made Liverpool a highly popular destination for overseas students and boosted the value of Liverpool student property investments.
Although the majority of students currently studying in Liverpool are from both the UK and Ireland, the number of those choosing to come to the city’s universities from further afield is growing every year.
For instance, the University of Liverpool alone currently hosts over 8,000 international students, while the student population of John Moore’s University spans some 100 countries.
In addition, the fact that the city hosts one of the UK’s largest Chinese student populations is a further indicator of the strength and versatility of student property investment Liverpool.
A member of the prestigious Russel Group, the University of Liverpool has been particularly successful in its recruitment of Chinese students, who now account for around 1 in 5 of the total student body.
This stems largely from the university’s role in the establishment of the Xi’an Jiaotong – Liverpool University, a partnership that brings up to 3,000 Chinese students to Liverpool usually for a period of two years.
By 2030, this partnership is expected to have attracted around 30,000 students.
With this in mind, when it comes to student accommodation investment property, Liverpool is an excellent area to consider even if you base your investment solely around the city’s growing population of Chinese students.
Notably, this influx of international students has also attracted significant attention from overseas investors.
Tuition fees for international students in the UK can reach up to £38,000 annually, indicating that most people moving to the UK to attend university will have significant financial support behind them.
Additionally, being away from home, international students are much more likely to stay in PBSA than domestic students, even if it is more expensive.
In many cases, this has led to the parents of international students purchasing a property for their children to live in for the duration of their studies.
By the time the student is ready to move on, investors – understanding the demand for such property – can retain it and receive a regular rental income, or sell it and profit from capital appreciation.
This can be a particularly lucrative option in a city like Liverpool where buy to let property is consistently increasing in value.
Again, when it comes to student property investment, Liverpool presents a stable, long-term opportunity, as is highlighted by the sustained increase in international students moving to the city and the overseas investment that this is attracting.
So we’ve gone through the reasons why, but it’s equally important to know where to find the best Liverpool student investment property.
As one of the best places to invest in UK property, there are a number of strong buy to let areas across the wider city region, but when it comes to student investment property Liverpool has a couple of stand-out districts.
Home to the city’s thriving Knowledge and Cultural Quarters, central Liverpool is easily the best place to invest in student property.
Boasting the highest rental yields and the city’s epicentre of student life, investing in PBSA in and around Liverpool city centre is a surefire way to develop a secure and lucrative investment strategy.
Not only is it where the majority of students want to live, – particularly those from overseas – the bustling heart of this thriving city contains some of the best student investment properties Liverpool has to offer.
State-of-the-art developments like the Exchange Liverpool for instance, have changed the face of student living across the city, offering residents everything they need to enjoy contemporary student life.
In addition to a seemingly endless collection of popular bars and restaurants, the area is home to the city’s two main universities – The University of Liverpool and John Moore’s University, making for a quick and easy commute to class for students based nearby.
In recent years, a host of investment and regeneration projects has further boosted the value of buy to let property in the surrounding area.
The most notable of these include the £2 billion Knowledge Quarter which has quickly become a key centre for education, health, science, technology and innovation.
A huge draw for both domestic and overseas students, the Knowledge Quarter is a major regeneration zone with a 2025 master plan encompassing ambitious projects like Paddington Village, the Bio-Innovation Hub and Liverpool Science Park.
Liverpool’s thriving Baltic Triangle district conveniently links the city centre to one of the UK’s most exciting hubs for independent business.
A hive of employment and recently voted the UK’s coolest place to live, the Baltic Triangle is seen as the digital heart of Liverpool and has become a popular residential area among students and young professionals.
Generating strong rental yields of around 6%, along with competitive property prices, the Baltic Triangle is an excellent place to invest in buy to let property.
At present, there is a range of high-end residential developments currently under construction in this diverse and well-connected district that offer some of Liverpool’s best off-plan investment opportunities.
Home to over 500 businesses, employing over 3,000 people and offering a range of popular attractions like the Baltic Market, Arcains Gaming Arcade, and Ghetto Golf, the Baltic Triangle presents a great alternative to investing in the city centre and is well worth considering when it comes to Liverpool student property investment.
In terms of student investment property, Liverpool is home to a variety of contemporary developments that offer strong returns and secure long-term investments.
However, The Exchange Liverpool, based in the heart of the city’s student quarter and developed by Legacie Developments, currently emerges as the stand-out investment opportunity in the Liverpool PBSA market.
A short walk from both John Moore’s Copperas Hill Campus and the University of Liverpool, The Exchange is arguably the best-located student development in the city, ensuring high tenant demand.
Comprising a range of incredible onsite facilities that make for a student living experience that’s second to none, The Exchange is a fully completed and tenanted development of studio apartments and en suite clusters, available from just £89,950.
With excellent 7% NET rental returns, The Exchange is comfortably one of the best student investment properties Liverpool has to offer, presenting a unique and affordable opportunity to earn a lucrative passive income from a fast-growing market.
Get in touch today to find out how you can invest in the Exchange Liverpool and kickstart your Liverpool student property investment journey.
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