Dominus

Liverpool

We believe in Investing in the North West. When you invest it is vital that you do your homework and that means you know your areas. So periodically we will look at key Towns and Cities and give our impression about their prospects for an Investor. Be aware these are our impressions. We do not claim to have done detailed academic research and can take no responsibility for any figures we give that we will have picked up from general research and may not necessarily be accurate.

Liverpool is a city with a big name that has been in decline for many years if not decades. The decline has not just been in the cities fortunes but in its physical population which has shrunk by nearly a half over the last 60 years

However, it’s big name means that it tends not to be overlooked like many other areas in steep decline. There are always forces looking to revive the city.

And there have been numerous attempts to do so most of which have made no real difference. It has in our view a very attractive stock of property. Basic houses tend to be tastefully built and good to look at.  Its famous city centre has had a radical update with the impressive Liverpool One shopping centre. It is no longer the somewhat dangerous place it was once reputed to be and its very radical left wing politics of the past has largely been left behind. It wants to succeed.

It is very close to Manchester (just 40 minutes by car which often surprises those not familiar with the North because they have such amazingly different identities and yet are the same distance as Edgeware to Hampstead in London) We all know Manchester is on the verge of a major leap forward so surely Liverpool will benefit from that.

And yet and yet!!!!  Prices are astonishingly low as are rents. It is not easy to find Tenants. When you do find Tenants the quality is often not as good as in other areas where we operate. There have been many false dawns for Liverpool before.

But things could now be on the turn. There are major changes taking place thar really could make the difference.

The main ones are as follows:

  • A major new bridge, the Mersey Gateway Bridge, is being built for completion in 2017 which will significantly improve transport links
  • The local rail transport infrastructure is being upgraded and this has actually started and looks like it will happen over the next 5 to 10 years. It should bring the same benefits to Liverpool as the Manchester Metro Link
  • Liverpool 2 is a major deep port project close to completion by Peel Group It will enable Liverpool to handle the biggest container ships making Liverpool a gateway for delivery and distribution throughout the country.
  • The Mersey Waters Enterprise Zone covers both Liverpool Waters and Wirral Waters and is one of the largest in the Country. It is going to bring commercial and residential to this area with advanced manufacturing and light industrial development
  • The Anfield Regeneration Project in conjunction with Liverpool Football Club is improving the properties in Anfield, one of the poorest areas and bringing new jobs and commercial businesses into th

These are just a sample of developments going on in Liverpool Most critically Liverpool has embraced the Northern Powerhouse and has got an elected Mayor which is the key to being part of project. In fact, Liverpool is part of the powerhouse grouping of Liverpool Manchester and Leeds

In future issues we will report on specific developments in Liverpool but for now we would simply summarise the position as this. It is worth a punt. We are investing heavily in Liverpool because we feel the only way for it is up.

But it is an area that has to come with a strong health warning. In particular, it is important to understand that even if things do improve it is extremely unlikely they will improve across the board. This is an area where it is critical to make sure you pick the right areas that have the rental potential and where these developments are likely to have a relatively short term impact. Or to look for better areas which still offer interesting opportunities because prices are so low.

Why invest for Yield and how to do it Part 1.

Traditional Property Investors invest for Capital Growth. They look to buy properties in areas where they think there will be substantial Capital Growth. London has been the best example of successful growth investment.

There are many strategies to create growth even before a market starts to rise. You can buy a property and develop it to create growth. A house you convert to flats. A piece of land you build on. A building you convert from Commercial to Residential Use.

You can find Sellers who are so keen to sell that you can buy Below Market Value.

You can identify areas where there are structural changes happening that will create growth such as Investors who bought around the area developed for the Channel Tunnel.

Or you can tap into a market where economic forces are driving up prices irrespective of any actions taken by Owners.

Over the 20 odd years since Buy to Let started Capital Growth has been the main driver because of the nature of the UK economy during that period and because of the exceptional finance available for such Investment and the very favourable tax regime that supported it. The Government wanted to encourage private Landlords as a way of responding to a housing crisis caused by a lack of social housing being built by them and a fast expanding population requiring more and more homes.

During this period in many areas the returns on property investment were pitifully low especially in relation to the returns available by simply investing your money in a Bank. You would be buying properties where you were lucky to get a 4% gross return when you could put your money into a bank account and get 5% interest

But the capital returns were huge during this period and that is why so many people invested in property.  The crash of 2008 should have meant that investment for Capital Growth came to an end. In the North it did but in the South of England and especially London for a number of reasons growth actually increased even faster than before. With interest rates at an all-time low this meant more and more Investors took the plunge into Buy to Let in part 2 we will consider why that Growth may be set to end and why investment for yield is the better strategy to follow

The Northern Powerhouse Part 1

Our strategy is to invest in the North of England. This newsletter will as time goes by explain why we believe that strategy is the right strategy for property investment and how we implement that strategy.

But it will also look at the fundamentals of our chosen area to show why it has a great future. The most important of these is the development of the concept of the Northern Powerhouse. But what does this mean?

The North has been in decline for the last 100 years or so. There have been ups and downs in that decline but the overall trajectory has been clear. During that time all the industries that made the North the powerhouse of the Industrial Revolution declined or disappeared. From mining to shipbuilding from Cotton to Fishing they have all gone or have only a rump left.

It is not the only part of the Country to suffer decline but its decline has been greater because its rise was greater. Attempts to revive the North as in other areas focused on two main strategies. The first was to encourage individual businesses to invest in the area usually with heavy subsidies. The second was to pump money into the revival of individual towns. There were successes but fundamentally these solutions did not work. If the Country did well then that did benefit the North but the long term decline continued

The Northern Powerhouse concept provides a simple solution to this decline. Trying to understand the success of London it realises that the true route to success lies in looking not at specific investments or towns but at larger areas and linking them together as London links so many different successful areas in one overall area. In Part 2 we will look at how this is going to work.

West Cumbria Copeland Growth Strategy

Most people know little of Cumbria or what is happening in the County. But a lot is happening

Just recently the Copeland Growth Strategy Paper was launched giving details of £90 billion ( that’s right billion) of investment going into West Cumbria
A lot of that is around nuclear power but not all by any means

Follow the link below if you want to access the strategy paper.
http://www.copeland.gov.uk/attachments/copeland-growth-strategy

West Cumbria is a large area with a relatively small population. This strategy is going to have a major effect and means there will be many property investment opportunities

Worth following in our view.

Trident Renewed

Trident Renewed

We are all waiting to see what the impact of the new Government will be on Government Policy as proposed by the Cameron Government. There are many proposals that were on the table or in the pipeline that would have been of enormous benefit to the North and in particular the North West. The question is will these be pursued or not.

Well one very important question for those who have invested in Cumbria has been resolved and definitively resolved. That is the vote for Trident to be renewed.

The whole history of Trident renewal is long and tortuous. There was a vote last year in which the principle of Trident was accepted by the Commons after a split in the Labour Party. However the key vote was to be taken in mid 2016. This was the vote to actually approve Trident going ahead.

That vote however was postponed because of the Brexit Campaign. Had Remain won then it would have been brought back to the House for approval. However with Brexit then who was to know what would happen?

So it was a surprise to many when Theresa May decided to put this matter to the vote as her first policy decision before Parliament broke up for the recess. Now we can see that this was an astute political move. It gave her the chance to show Labour as completely split and to win a great victory. This was probably much more important in her calculations than Trident itself.

Whatever the reason however the effect is absolutely transformatory for Cumbria and for South Cumbria and Barrow in particular. It will bring jobs and money into the local economy on an unprecedented scale. It is one of a number of important decisions for the future of Cumbria which could see a step change in the County.

But even without these Trident will have a major effect on the local economy. Barrow is only a small town with a population of about 67,000. It is served by a town centre which has been in decline for many years and a retail park which is more successful but not very exciting. It is a town that cannot support any major retail restaurant chain ( not takeaways that are there in plenty) apart from Frankie and Benny. So there is no pizza express , nandos, café rouge. Carluccio or other chain. It has a very poor Vue cinema and a small theatre and that is it.

The billions to be spent on Trident will bring new jobs and an influx of contractors to work in the shipyards who will bring new prosperity to the town over many years as the project unfolds up to 2041. This has to have an impact on property prices, rents and development in and around the Town. As a major investor in Barrow we wait to see with great expectation.