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Liverpool landlords could achieve short-term yields of 30%

Airbnb hosts and landlords of short-term let properties in Walton, Liverpool are achieving the best yields of any location in the North West’s two largest cities (Manchester and Liverpool). That’s according to research by short-term letting agency Portico Host.

Walton Airbnb hosts can expect to achieve a rental yield of 30.68%, compared to 7.88% for landlords of longer-term rentals in the area. The highest long-term rental yield in Liverpool and Manchester can be found in Fairfield, Liverpool at 12.52%. The Airbnb yield is based on an occupancy rate of 60% of the year, which is typical for these types of properties due to seasonal demand, Portico Host says.

Situated on the outskirts of Liverpool city centre, Walton boasts a diverse and well-established residential area. Here, property prices are cheaper than in other Liverpool postcodes and much cheaper than in London, where the average property price is four times that of Liverpool, allowing landlords to achieve exceptional yields.

Of the ten best performing locations for short-term let yields, the top five are in Liverpool postcodes L4, L6 and L7. Meanwhile, in Manchester, the highest Airbnb yields can be found in Hulme (M15) at 17.4%.

According to Rachel Dickman, regional manager of Portico Host, people are attracted to Liverpool and Manchester by the excellent transport links, proximity to popular tourist attractions, employment hubs and good restaurants and cafes. Therefore, she said, it isn’t surprising to find that the properties that are achieving the greatest returns are those that are situated in these areas.

“Liverpool is becoming increasingly popular on the tourist trail, with 1.34 million people visiting the city in 2018, and with business travellers, students and young professionals,” she said. “A growing number are wanting to stay in short-term let properties, and the increased demand for this type of accommodation is underpinning the rents that can be achieved.”

What’s more, Liverpool is undergoing a £14 billion regeneration with plans for a new stadium for Everton football club and £250 million investment in road infrastructure. This, along with its growing student and young professional population and lower property prices, makes investment in places such as Walton, Kensington, Fairfield 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 has seen a huge influx in tourists and visitors, as improved transport links have made it easier to visit. In 2018, the city hosted 4.9 million visitors.

Hulme has seen more than £400 million worth of investment into regenerating the area. Its array of diverse eateries, bars and shops has made it very popular with young professionals and it’s just a few minutes’ walk from Manchester city centre.

Meanwhile, Ancoats was named the 13th coolest neighbourhood in the world in 2018 by Time Out. The area is a 10-minute walk from Manchester Piccadilly and boasts affordable co-working spaces, apartments with riverside views, craft beer outlets and artisan bakeries.

There are currently 10,200 active listings in the North West on Airbnb, according to its latest insight report. The report also states that Airbnb has brought in nearly £37 million to the North West’s economy.

Short-term lets and Airbnb properties aren’t just popular with holidaymakers, but also those who are between properties and are eager to find the flexibility of short-term lets with no overheads. That’s because short-term lets provide homeowners and buy-to-let landlords with the opportunity to make extra income from their properties, especially during void periods between lets or long-term rentals.

Portico’s Emma O’Rourke added: “Good news also for landlords is that mortgage lenders are waking up to the popularity in short-term lets, although they do remain cautious of the risk it poses to their balance sheets.”

“Last year, one lender launched a mortgage aimed specifically at Airbnb hosts and landlords who want to rent out rooms in their home for short and ad-hoc periods. We expect high street lenders to follow suit with more mortgage products for these types of properties coming to the market, making it easier for people to let a property in the short-term.”

And, despite more first-time buyers getting their foot on the property ladder in Manchester and Liverpool over recent years, the private rented sector has continued to grow. Portico forecasts that the market in the North West is due to outpace the London market in 2019.

In Manchester, the private rented sector has increased by over 149% over the past 20 years, while Liverpool has seen an increase of 181% in the same period, according to data compiled by the BBC.

It is also expected that house prices and rents for longer-term rental properties will increase by circa 3% per annum over the next five years in Manchester, as demand for home continues to outstrip supply.

In Liverpool, the growth in house prices is expected to be 2% per annum over the next five years, and 3% for rents.

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