Managing director of City Residential in Liverpool believes city centre living will boom again after COVID-19 as city centre prices become more attractive relative to the suburbs. Tony McDonough reports
COVID-19 has led to a surge in residential property prices in Liverpool’s leafier districts as the pandemic has sparked a “flight to the suburbs”, a new report says.
In his latest quarterly update on Liverpool’s residential sector, City Residential managing director Alan Bevan says lockdowns and the closure of city centre leisure venues have prompted an exodus to the suburbs.
However, Mr Bevan adds he expects there to be a new surge in interest in city centre living once we are past the worst of the pandemic and businesses start to open up again. And he rejects the idea that the rapid rise in homeworking will sound the death knell for the traditional office.
He said: “Many commentators have written off city centres highlighting their belief that people will not return to their offices. They claim that home working has become the norm, and people will continue to avoid large crowds even post-vaccine – and they would prefer to spend the rest of their lives in the leafy suburbs.
“We do believe that these commentators are wrong. Flexible working will become more standard but for many city workers the city is a huge part of their life, both professionally and socially. We speak to many employees who are desperate to get back to working, shopping, and socialising like in the old days.”
Mr Bevan said many businesses in the leisure and hospitality sectors had expanded significantly in recent years as Liverpool’s visitor economy boomed and had been “cruelly exposed” by the pandemic. A study by the city council last autumn estimated leisure and hospitality in the city lost more than £1bn in the first few months of COVID-19 alone.
“This is a major problem for a city like Liverpool that depends hugely on its reputation as being a lively, vibrant location to live, work and play,” said Mr Bevan. “Turning the problem on its head however, highlights that this may ultimately become a positive rather than a negative.
“Many northern cities rely on their strong institutional employers such as banks, solicitors, and accountants, something that Liverpool does not. While these other northern cities may take a lot longer to recover, Liverpool can continue to offer to its residents, workers, and visitors a wonderful range of restaurants, bars, cafes and culture.
“Yes, we will lose some great businesses before we emerge from the lockdown, but the city’s reputation and attractiveness are too strong for it not to recover, especially as many customers will be looking to make up for the last 12 months.”
Returning to the theme of property prices, he added: “This flight to the suburbs has pushed prices of both house sales and rentals substantially higher and certainly way beyond where we would have expected them to be when we had our first lockdown in March 2020.
“When the lockdowns are over, and some normality returns both buyers and tenants will begin to realise the value the city offers in relation to the suburbs. There was already a decent gap between the two and this has only been growing during the last six months.
“Judging by the performance of the sales market during the last six months, many buyers are already trying to take advantage of this (accepting that this has been driven by the stamp duty holiday offered by the chancellor).
“Tenants will no doubt follow during 2021 especially as house prices have become ever more unaffordable to many during the pandemic.”