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Liverpool is the place to find the best yields for short-term lets

We take a look at the best performing locations for short-term lets in Liverpool, focusing on the estimated yields Landlords can expect to generate.

Peter Scully | 31st October 2019

Liverpool Waterfront

fairfield liverpool short term figIf you mentioned Liverpool to a property investor, their first thought would probably be the numerous students and young professionals who ensure a constant demand for buy-to-let property.

While this is absolutely true and it is certainly reasonable to target these markets, it’s also true that Liverpool has huge demand for short-term lets and this demand can produce great yields for landlords.

Liverpool’s short-term lettings hotspots

Property investors familiar with Liverpool may be rather surprised to learn that its number one hotspot for short-term lettings is - Fairfield, generally better known as “student central”.

While there are no statistics on this, one very plausible explanation is that a lot of visitors to Liverpool will have some kind of connection with one of the (three) universities and hence would want to be in the same areas as the students.

There is, however, quite a divergence in the yield investors can expect to earn from these short-term visitors (27.2% assuming 50% occupancy) as compared to the students (13.6%). Other areas of Liverpool which offer yields of over 20% include Walton (25.5%), Kensington (24.2%), Kirkdale (23.9%), Anfield (22.7%) and Toxteth (20.9%).

Best performing locations for short-term lets yields in Liverpool

AreaPostcodeShort-let yields (%)Short-let Gross IncomeRental yield (%)Rental Gross IncomeAverage House Price
Fairfield L6 27.2% £32,883 13.6% £16.716 £126,779
Walton L4 25.5% £18,493 7.9% £5,700 £72,317
Kensington L7 24.2% £27,405 9.8% £12,260 £119,150
Kirkdale L4 23.9% £15,930 8.5% £5,786 £73,564
Anfield L6, L4 22.7% £23,766 9.6% £10,457 £102,772
Toxteth L8 20.9% £13,779 9.0% £5,775 £74,250
Orrell Park L9 17.5% £13,779 7.5% £6,360 £91,500
Vauxhall L2, L3, L5 15.5% £20,885 6.80% £20,885 £139,061

Source: Portico

Economic growth and regeneration continue to fuel the demand for short-term lets

Liverpool has long since shaken off its post-industrial slump (horrendous though it was at the time), but has spent most of the time since then overshadowed by Birmingham and even more so by its near(ish) neighbour Manchester, which has become the heart of the Northern Powerhouse initiative.

It is, now, however, finally emerging as an economic hub in its own right - and also a major tourist destination. Liverpool’s famous port is now welcoming cruise ships from around the world, possibly drawn to visit the city after having seen it on film or TV.

This means that there is already huge demand for short-term lets (which many people prefer to hotels as they feel more like a home-from-home) and all the signs are that this demand is only set to grow.

Short-term lets are more hands-on than standard rentals

When considering whether or not short-term lets are a market which might interest you, it’s important to remember that they require more active management than longer-term rentals.

For example, when people are only in a city for a short time, they generally want to be out and about as much as possible and not at home cleaning, so employing a cleaning service is generally highly recommended.

There will also, obviously, be a much greater turnover of tenants and hence more focus on marketing. Having said that, with yields of over 20% landlords could hand over the day-to-day running of their property to a specialist company and still achieve more than they could have done with a long-term rental (and far more than they could have done in the south of England).

Also, the presence of the three universities means that even if landlords change their minds about short-term lets, they still have the student and young-adult markets.

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