Liverpool resi prices hit by repos

THE value of apartments in Liverpool’s city centre market have fallen by 6% in the last 12 months as more repossessed stock is sold at a discount.

The latest residential update by agents City Residential states that a rise in repossession reported in late 2011 picked up pace in the first quarter of 2012.

Managing director Alan Bevan said that he was “surprised” by the number of repossessed apartments being brought to market.

“Although there are a couple of large repossession portfolios that have come to the market, there also appears to be more lenders looking to offload non/underperforming assets.

“A lot of Irish clients who have bought in the city over the last 10 years are also coming under pressure from both Irish and UK lenders to refinance their portfolios; something we know is very difficult to do in this market.”

He points out that the market continues to offer decent yields for investors, with average rents creeping up by 1.2% over the past year to £733 in the city centre or £712 for a docklands apartment.

However, he added that the city “can not afford to see a much higher level of repossessions flood the market as this will no doubt destabilize the reasonably good level of supply and demand”.

“There is no doubt some of the banks are definitely ‘shaking the tree’ and will no doubt increase supply but lets hope that it does not create a momentum that other banks/lenders feel obliged to follow.”

He said the city was continuing to see cash-rich parents buying small city centre apartments for student offspring rather than handing over rents, but added there were few first-time buyers in a market where there were properties available for under £100,000.

An analysis of the city’s student market also highlighted the frenetic levels of activity in the student property sector, which is offering yields of up to 10% for relatively low capital costs (sub-£50,000).

“Middle England are the main driving force behind the majority of these schemes, with other developers/landowners looking to capitalise on the interest being shown.”

Its analysis shows there are currently almost 1,400 rooms under construction, with the university itself onsite on a £45m scheme to create 710 new ensuite rooms on a site at Crown St/West Derby St that also includes a conference venue, while Middle England is on site at the former Hatton Gardens Fire Station and St Andrews Church on Rodney St (right), among others.
Planning has also been approved for a further 1,500 rooms, and 1,864 more are said to be in the pipeline.

“Although September still seems a long way away the universities appear to be confident that student numbers are holding up very well which, given the concerns over student fees, is very good news.

“Whilst it will be interesting to compare the demand with other cities there is no doubt the attractions of Liverpool as a great place to study is continuing to have a positive influence,” he added.