Investing in Liverpool property: rental yields, areas and risks

Liverpool remains one of the UK’s most closely watched cities for buy-to-let, combining comparatively low purchase prices with rising rents: the average home cost £189,000 in July 2026 and the average private rent reached £913 a month in August, according to official figures. On those numbers, analysts estimate a citywide gross yield of around 5.8%, but returns vary sharply by property type and postcode.

The regulatory backdrop has also changed significantly. The Renters’ Rights Act has been in force since May, Liverpool City Council is deciding the future of its landlord licensing scheme, and higher stamp duty on additional homes continues to weigh on entry costs.

Prices and rents: what the official data shows

The Office for National Statistics puts Liverpool’s average house price at £189,000 in July 2026 (provisional), up 8.1% on a year earlier. Terraced homes averaged £179,000, up 9.7%, while flats and maisonettes averaged £130,000, rising a more modest 4.3%. Average monthly private rent rose 5.6% year on year, from £864 to £913.

Using the same Land Registry and ONS data, research by Landlord Resource reported by Property Investor Today placed Liverpool top of its buy-to-let hotspot list, with a gross yield of 5.80% and the strongest one-year price growth of the cities analysed. Manchester recorded a higher gross yield in the same table (6.50%), so Liverpool’s ranking reflects price and rent growth rather than yield alone.

Areas commonly cited by investors

Postcode-level yield studies should be treated with care, as many are several years old and rely on asking prices rather than completed sales. A 2020 TotallyMoney analysis covered by Property Reporter ranked L1, the city centre, as the UK’s top buy-to-let postcode with a potential 10% return, and placed five other Liverpool postcodes in its top 25. Those figures pre-date recent rate rises and regulatory changes. Areas that tend to feature in investor discussion include:

• L1 city centre and the Baltic Triangle: largely apartments, where entry prices are lower but the ONS data shows flat values growing more slowly than houses.
• Kensington (L7): on the eastern edge of the city centre near the Knowledge Quarter; L7 topped some earlier national postcode yield tables.
• Anfield and Walton (L4): predominantly terraced housing, the property type that recorded the city’s fastest price growth over the past year.
• Wavertree (L15): a largely residential suburb with a mix of terraced and semi-detached housing.

Local yields depend heavily on the specific street, condition of the property, management costs and void periods, none of which are captured in headline averages.

Risks: apartments, off-plan and supply

The gap between flat and house price growth is a reminder that city-centre apartments carry particular risks. Service charges and ground rents reduce net returns, and lenders can be more cautious on small or high-density units. Liverpool has also had a well-documented history of stalled off-plan schemes in which buyers lost deposits, so due diligence on developers, escrow arrangements and legal advice is essential before committing to unbuilt stock.

Regulation: licensing, the Renters’ Rights Act and tax

Selective licensing

Liverpool’s current landlord licensing scheme launched in April 2022 and ends in March 2027. The council consulted until early October on three options for a successor: a citywide scheme across all 64 wards, a scheme covering 29 wards with high deprivation, or one covering 26 wards with evidence of poor conditions. Landlord Today reported proposed fees of up to £995 per property. A final decision is still awaited.

Renters’ Rights Act 2025

Under the government’s implementation roadmap, section 21 “no-fault” evictions were abolished on 1 May 2026 and tenancies moved to an assured periodic basis. Rent increases are limited to once a year with at least two months’ notice. A private rented sector database with mandatory landlord registration is due to begin rolling out from late 2026.

Stamp duty surcharge

Buyers of additional dwellings in England pay a 5% surcharge on top of standard Stamp Duty Land Tax rates, raised from 3% for transactions from 31 October 2024. The surcharge also applies to purchases by companies.

Key takeaways

Official data shows Liverpool combining relatively affordable prices with solid rental growth, but the averages hide wide local variation and rising compliance costs. Licensing fees, Renters’ Rights Act obligations and the stamp duty surcharge all affect net returns. This article is for information only and is not investment advice; anyone considering a purchase should take independent financial, legal and tax advice.

Frequently asked questions

What is the average rent in Liverpool in 2026?

ONS figures put the average private rent in Liverpool at £913 a month in August 2026, up 5.6% on a year earlier.

Do Liverpool landlords need a licence?

Landlords in designated areas currently need a selective licence under the scheme running until March 2027. The council is deciding what replaces it, including a possible citywide scheme.

Can landlords still use section 21 notices?

No. Section 21 was abolished in England on 1 May 2026 under the Renters’ Rights Act 2025; landlords must now rely on statutory possession grounds.

Sources

• ONS – Housing prices in Liverpool
• Property Investor Today – Liverpool overlooked as buy-to-let investment hotspot (Oct 2026)
• Property Reporter – Liverpool remains top for BTL yields (July 2020)
• Landlord Today – Council licensing proposals have 12 different fees up to £995 (July 2026)
• GOV.UK – Renters' Rights Act 2025 implementation roadmap
• GOV.UK – Increase to the higher rates of Stamp Duty Land Tax