Culture Year effects have already been felt

Sep 19 2007 by David Bartlett, Liverpool Daily Post

In the third of a week-long series of special reports on the region’s property market, David Bartlett looks at the effect of next year’s Capital of Culture celebrations

WILL next year’s Capital of Culture celebration in Liverpool bring an added impetus to the currently stagnant Merseyside property market?

It’s a view held by some, but the evidence would appear to suggest the main surges may already have been felt.

Glasgow saw only modest price increases in its housing market after it was European Capital of Culture in 1990, according to officials in the Scottish city.

Between 1990 and 1997, new-build prices increased at an annual rate of 3.7%, and second-hand homes saw their value increase by 4.9% a year from 1990 to 1999.

Glasgow council officials said the market did not see large rises until the last property boom which saw the entire UK market pick up.

Economist Peter Stoney, however, thinks that while a slowdown has already started in the region, the infrastructure upgrades that will come into line next year may help Liverpool suffer less than other areas.

“You would not expect there to be an impact on people buying property, most of the benefits will be seen in the tourism and leisure sectors,” said the honorary senior fellow in economics at Liverpool University.

“But Liverpool has had considerable infrastructure development. It may well be that Capital of Culture reinforces those benefits.”

He said of particular importance was Europe’s largest retail development, Liverpool One, due for completion by Grosvenor next year and expected to create 7,000 new jobs.

It is hoped the 160-plus shops covering more than 1.4m sq ft of retail space, 230,000 sq ft of restaurants, cafes, bars and a 14-screen multiplex cinema will also attract people to live in the city that might not have come before.

The £1bn complex is due to open in spring next year.

“The combination of Capital of Culture and the massive invest- ment could have a bigger effect than what Glasgow saw,” said Mr Stoney. He said the period following Glasgow’s culture year was one of little growth in the market across the UK.

However, there is a lot of anecdotal evidence that Liverpool may have already benefited from the Capital of Culture status.

Paul Sutton, managing director of the Sutton Kersh agency, said when the decision was announced in the summer of 2003, Liverpool’s market had started to peak.

“When the announcement came it was a like a shot in the arm,” he said.

The decision to award the city the cultural honour had boosted confidence in Liverpool, especially the city centre apartments market.

Estate agent Louis Anastasiou, from the Andrew Louis group, said: “The whole market was very buoyant anyway, but when it was announced that Liverpool was the winner of Capital of Culture it accelerated.”

The announcement helped drive the number of investors looking for buy-to-let properties.

“There were a lot of Irish investors, but also from the south of the UK and from abroad.

“There are still people looking but it has dried up a bit,” he said.

The Northern Irish have also got in on the act in the last two years as the price of property in the province rocketed and successful investors looked to “play up their winnings” across the Irish Sea.

Mr Anastasiou said as prices had risen, rental yields and capital returns had diminished and the buy-to-let market was nowhere near as busy as it once was.

Both Mr Anastasiou and Phil Furlong, of the Venmore Partnership, agree that when Liverpool One comes into being there will be a fresh wave of demand.

Mr Furlong believes one of the largest challenges to the region’s housing market is the lack of jobs.

“There has been plenty of supply, but what has lagged behind was the jobs.

“Now you have got a point where you have virtually satisfied demand.

“There will be new demand when new jobs come, like with the Grosvenor development.”

davidbartlett@dailypost.co.uk