The grim reality of parts of the property market in Liverpool. Worked stopped on this property Norfolk Street in November last year. Unless it starts again soon it will probably need to be demolished.
The recent legal cases against property developers in the City involving jointly more than £500,0000,000 should be telling the council that an urgent review is needed of the property market in our City to prevent boom turning in to bust”. That is why the Liberal Democrats are tabling a motion to the Council Meeting later in September calling for a full review of the market in the City.
We feel that there are dangerous signs that the property market is overheating fed by an investment system, in which unsustainable yields are being promised to investors who take all the risk of the property not being built or the yields not being sustained.
As an example, I have been contacted by someone who lives in Dubai who bought a property for £140,000 10 years ago; is selling it for £110,000 and has been advised by the agent handling his sale to accept any offer over £90,000. This is a huge loss – 30%+ – for a property which has been vacant for more than half the time he has owned it. He would have done better burying the money in the desert sands than putting it into this property which is in one of the best blocks in the City.
And that is if the blocks get built at all! We know that there are at least four blocks where money has been taken in huge volumes which are never likely to be built at all. The Chinese community believes that the Hong Kong and Chinese community alone have lost more than £200,000,000 in these specific investments but there are other examples from other developers where they have not been able to properly access the properties they have bought and are making huge losses on what was supposed to be a good investment for their old age.
This is not all Liverpool’s fault or Liverpool’s problem. According to Granada TV there are unfinished blocks and unfilled holes in cities across the Country and many of the developers who have left these shells or holes are inter-connected. The fact is that at the planning committee we cannot ask whose money will be used. We cannot oversee the development of the City as a whole because the planning laws assume that ‘the market will provide the level’. That is why the only sensible way that the Council can respond is to strategically review the needs and aspirations for housing against the current supply and the future needs. In that way both investors and responsible developers can decide against the city backdrop what the likelihood is of yields being achieved and sustained.
Liverpool will get an increasingly bad international reputation if the Council does not get a grip on the market for student and apartment style accommodation to ensure that buildings match need. We cannot rely on the market to arrive at the right level because of the funding mechanisms being used. Unless we do this at some time, in the not too distant future, the number of empty properties will soar; if indeed they are completed. Our job as a city is not to allow boom and bust but to plan for sustainable growth and work with the many responsible developers to achieve it
If we don’t do this within 5 years Liberal Democrats believe that Liverpool will be covered in half occupied blocks and half littered with undeveloped blocks like the one in Norfolk Street pictured above. Jam today will become dust tomorrow and the people of Liverpool will be left to deal with the problems created and pick up the bill.
The full text of the motion is appended below:
Review of residential accommodation in Liverpool
Cllr Richard Kemp CBE, Cllr Andrew Makinson
Council believes that there is a potential problem in the City caused by the over provision of student and general flatted accommodation and that this problem is exacerbated by the fractional marketing techniques being used to promote both failed and active developments.
Accordingly, it requests the Mayor to conduct and urgent review into the property market in Liverpool indicating:
How many units of all types are on site
How many units of all types are empty
The total number of units of all types for which planning permission has been approved and which are on site and being built.
The number of units of all types for which planning permission has been granted and which are not yet on site.
The number of units for students that could be changed to standard accommodation for none-students if there was a market drop.
And as part of the review look at:
The needs of the City for student accommodation based on a static student population; one that grows by 5% in the next 5 years and one which decreases by 5% in the next five years.
The needs of the City for flatted accommodation based on a 5% growth and a 10% growth in the City’s population over the next 10 years.