Portico unveils highest rental yields in North West England

UK: Landlords of short-term rentals in the Fairfield area of Liverpool are recording the highest yields in the North Western cities of Liverpool and Manchester, according to research published by letting agency Portico Host.

The research reveals Fairfield landlords letting out properties as short-term rentals are achieving an average rental yield of 27.2 per cent, compared to long-term rentals in the area which are recording typical yields of 13.6 per cent.  

The short-term rental yield is calculated on an occupancy rate of 50 per cent of the year.

The residential area of Liverpool is located on the outskirts of the city and has become increasingly populated with students in recent years, given its proximity to the city centre and recently built shopping centre facilities.

However, despite the high yield returns, property prices were found to be significantly lower in Fairfield than in London, where the average property price remains at four times that of Liverpool.

When researching the best performing locations for short-term let yields in the North West, eight of the top ten was made up of areas in Liverpool postcodes while Hulme recorded the highest yields for short-term rentals in a Manchester postcode.

Speaking to About Manchester, Portico Host regional manager Rachel Dickman 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,” she added.

With investment being ploughed into the local economy, infrastructure and the city’s football teams, areas in Liverpool with cheaper property prices such as Fairfield, Kensington, Walton and Anfield represent attractive propositions for ambitious investors.

Manchester is experiencing a similar regeneration, as highlighted by the fact that the city welcomed close to five million visitors in 2018 alone.

Meanwhile, a recent insight report by Airbnb showed there were 10,200 active listings in the North West of England on its platform, with both holidaymakers and travellers keen to take advantage of the availability of supply.

Now Portico has announced it is launching a property portfolio investment service, entitled Portico Portfolio, which will allow landlords to invest in buy-to-let or short-term lets in Liverpool and Manchester in a company structure that is tax efficient. To facilitate the tax side of the arrangement, it has partnered with London-based accountancy firm, Accounts and Legal.

Portico marketing director Fiona Veitch told About Manchester: “Portico Host expanded into Liverpool and Manchester earlier this year which has been really successful, and we’ve seen a growing number of landlords look to invest in these areas. In line with this, we wanted to create something unique that makes it easy for London landlords or those sitting on savings to invest in the booming north west.

“Launching Portico Portfolio allows us to combine our lettings or Portico Host service with Portico Finance, to generate impressive and tax efficient yields for property investors. 

“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,” she added.

Using Land Registry data, Portico revealed that the average property price in Liverpool had shot up by 19.34 per cent over the past five years, up from £108,267 in June 2013 to £129,562 in June 2018. 

Similarly in Manchester, the average property price went up by 47.76 per cent to £177,243 in the same period.

Portico research suggests property prices will further increase in the next five years, possibly by as much as 21 per cent, due to changes in government policy, regeneration projects and firms’ relocations to the North West from London to reduce operating costs once more.

For more information, visit the Portico Portfolio website here.