If prices have hit the bottom in Liverpool, it is fair to say that recovery is
coming nationwide. With a glut of city-centre apartments that no one wanted,
developers going bust, investors fleeing and an annual price drop of almost
17 per cent, Liverpool was hit harder than most by the crash.
It is still dealing with the aftermath. At least 20 investors in the £11
million Atlantic Gateway scheme, Stella Nova, intended to help to regenerate
Bootle, are reported to have told the developer Nick Kollakis that they want
to pull out.
Sporting stars including boxer Joe Calzaghe, his father Vincenzo “Enzo”
Calzaghe, and four Premier League footballers — Everton and England’s
Leighton Baines, Aston Villa’s Luke Young, Birmingham City’s James McFadden,
and Glasgow Rangers’ Lee McCulloch — are all believed to have agreed to
purchase flats in the scheme. Prices started at £100,000 and deposits were
typically 10 per cent. There is no indication that they are among those who
do not intend to complete their purchases.
According to the latest Land Registry figures, average Liverpool prices are
now £100,308, compared with £120,848 in July 2008, but it seems that a
corner is being turned. “Prices have gone as low as they are going to go for
the time being,” says Shannon Conway, the sales manager at the city-centre
estate agent King Sturge, which specialises in apartments. “We haven’t seen
a significant drop over the past few months. And we have had more inquiries
from people wanting to buy.”
Of course, the Liverpool market is not dictated entirely by the performance of
city-centre apartments. In popular suburbs such as Woolton, Allerton and
Aigburth, which offer properties from family houses to starter homes, agents
report that the market has been slow — completed sales are down by more than
50 per cent year-on-year across the city — but has not ground to a halt.
“I definitely can’t see prices getting any lower,” says Lee Brinkley, area
manager at estate agent Roberts Edwards and Worrall, which covers Speke,
Aigburth, Allerton and Netherton. “But what we have seen these past few
months are first-time buyers coming out of the woodwork. We’re not seeing a
great deal of those who might have only £80,000-£90,000 because they tend to
be on low incomes, and can’t get those 100-125 per cent mortgages any
longer. It’s people with a decent deposit who can afford from about £130,000
up to the stamp duty threshold.”
Brinkley adds that while viewings are up, with popular properties attracting
up to ten offers, closing sales is a different matter. “Vendors are holding
out for the prices. They have watched their home increase in value in the
past ten years and have just possibly seen 20 per cent wiped off the value
of their equity. We are finding this reluctance to settle for selling at a
low price especially when people are either selling up or downsizing.”
Caution also characterises the long-established pockets of prosperity. To the
north of Liverpool, in prestigious seaside locations such as Blundellsands
and Formby, for example, there are plenty of houses in the £2 million-plus
category. But who can afford them?
“There are nowhere near as many buyers as there were two years ago,” says Alex
Horne, director of Savills' Chester office, which is marketing a
five-bedroom/eight reception, Neo-Georgian house with swimming pool (as on
page 15) in Hall Road East, Blundellsands, for £3.6 million. “We still have
buyers from the sporting world, but we are seeing people who have been very
cautious with their capital and are now reaping the rewards of the lower
capital values. It is more of a hidden market; people who have perhaps sold
a business.”
However, while the wider Liverpool market tells a story that has been repeated
in large towns and cities throughout the North, the city centre provides a
fascinating — and cautionary — tale of its own.
From a high of about £185,000 in the summer of 2007, the average price of a
Liverpool apartment has fallen steadily, to £146,253, a drop of 18 per cent.
This price shift underlies the two trends dominating the city-centre market;
a tremendous boom in rentals, and the appearance of owner-occupiers,
especially first-time buyers.
Careful developers, such as Rumford Investments, which owns the Unity Building
— a development of 155 apartments, plus six penthouses, in the business
district — are choosing to rent out their units (from about £900-£1,000 a
month for a fully-furnished apartment) and wait until sale prices rise again
rather than struggle to achieve completions.
“The rental market has gone through the roof,” says the sales and marketing
manager, William Coleman. “We’re full. We’re having to turn people away. But
everybody wants everything — toasters, kettles, parking spaces. There is a
huge expectation now from rentals. I’ve even had to go out and get 20 40in
LCD TVs.”
It is ironic that the crash has brought more residents into the city centre
than the boom ever did. This element of “try-before-you buy” is helping to
persuade first-time buyers to take the plunge. Shannon Conway identifies two
types: those who have saved up, on average, a 15 per cent deposit and are
looking to buy a one-bedroom apartment for about £115,000, and those with
parents helping them to invest in a two-bedroom apartment for about
£160,000, with a view to renting out the second bedroom.
“Ninety per cent of our sales are now to owner-occupiers,” says Conway. “Two
years ago the split would have been 50/50 with investors. Investors are
still around, but they tend to be after 30, 40 or 50 units, and are coming
in with low offers. These don’t make sense to the developer. It’s better for
them to rent out until the market picks up properly.”
She believes that Liverpool has been very lucky. “Compared with Leeds,
Manchester and Birmingham, we got away lightly. We didn’t start building
apartments until much later, so we didn’t have as much over-supply. The
credit crunch came at the right time. The market stopped, but we got a brand
new city centre. And now we’ve got apartments being rented out, and people
starting to buy the ones that are vacant.
“I think things will stay steady for six months. Confidence will increase and
next year will start to see a little bit more of an interest. I just hope
that this flurry of buyer confidence doesn’t get out of proportion.”
Savills, 0845 3035558, savills.co.uk
One Park West building
It is quite an achievement for a block of flats to get nominated for the
Stirling Prize for outstanding architecture and the Carbuncle Cup, run by
Building Design magazine for the UK’s worst building. But the architect
Cesar Pelli’s One Park West building, a 17-storey, 326-apartment boat-shaped
glass block jutting out towards the River Mersey, has succeeded.
The Carbuncle Cup nomination was for the whole of the property company
Grosvenor’s £1 billion, 42-acre development Liverpool One, of which One Park
West is only a part. The rest includes a trendy shopping centre, restaurants
and a park. Liverpool One missed out on the Carbuncle Cup last week when the
prize went to another new Liverpool building, Hamilton Architects’ Pier Head
Ferry Terminal, but strong opinions divide the city.
David Dunster, of the Liverpool School of Architecture, says One Park West has
“one of the nastiest-looking pieces of standard office glazing since Britain
was bombed by the Luftwaffe; and cheap. The prow can only be a ghastly
reference to Liverpool’s maritime past and conclusive evidence that all
architects should be banned from the use of metaphor or simile in the next
100 years at least.”
It has certainly put Liverpool on the architectural map. But it hasn’t
deterred Philip Ball (pictured, left), who has invested about £1 million in
a penthouse and a 16th-floor three-bedroom flat in One Park West (both
1,300sq ft). The penthouse has been kitted out by an interior designer, the
apartment will be unfurnished, and he hopes to let them for £2,500 and
£2,000 a month, respectively. “It’s a long-term investment,” says Ball, 49,
who owns a beauty treatment company, Crystal Clear. “With this one you can’t
go wrong. You can walk everywhere: it’s close to Albert Dock, and next to
the Palm Sugar Lounge, part of the prestigious Chaophraya restaurant.”
As The Times reported, other buyers include retired people who want a city
pied-à-terre without the responsibility for a garden.
Guy Butler, the senior development manager for Grosvenor, takes a more sober
stance. He has been hit by accusations of price-slashing, prompting fears
that One Park West will drive down prices in the rest of the market. Prices
have been reduced by about 10 per cent and now start at £90,000 for studios,
up to about £650,000 for the largest flats. All the one and three-bedroom
units have gone, but studios have been hard to shift. “People don’t get
studio apartments outside London,” Butler says.
So far, 92 flats have been completed. In total, less than half the apartments
have sold, or are in the process, and he is having to work hard to secure
sales. “People have become scared and put their heads in the sand. We‘ve had
to work with people to get flexible deals; we’ve coaxed them out.”
And his answer to the controversy about One Park West? “We’re not going to
cower away and be ashamed of ourselves,” he says. “We’ve done something
different — 100 years ago people hated the Royal Liver Building, but like
the Liver Building, this will be a landmark.”
Contact: King Sturge, 0151-242 6490, kingsturge.co.uk; to rent Philip Ball’s
penthouse or apartment, call 07739 983939
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