Is Investor Optimism Masking Real Value?

Good morning,

Liverpool’s property market is buzzing, but is the excitement blinding investors?

Confidence can spread fast, and sometimes that optimism seeps into property prices. But is this truly reflective of the market’s fundamentals, or are we witnessing the beginnings of a bubble?

In this week’s edition, we’ll explore why it’s crucial for investors to recognise when prices are over-inflated, uncover what’s driving that inflation, and understand which stage of the economic cycle we may be in.

Let’s dive in.

In this newsletter, you'll find...

• This Week’s Biggest News…….

• The 18-Year Property Cycle: Where Liverpool Stands in 2025

• Property Listings

• Bottom Line

• What's Next?

• Feedback

This Week’s Biggest News…….

1. London homes 500m from station ‘command £42,700 premium over those 1,500m away’.

2. Starmer pledges further clampdown on short lets – but not yet.

The 18-Year Property Cycle: Where Liverpool Stands in 2025

I’ve been property shopping for a client recently and paying closer attention to Liverpool, as you might have noticed from my recent newsletters.

And for good reason.

Major investments are flowing into the city, and as one of the largest urban centres outside London, Liverpool is reaping the benefits of the broader Northern growth push.

Timing the cycle is everything

If you’ve followed UK property trends long enough, you’ll know the market often behaves like clockwork — rising, correcting, and booming again roughly every 18 years.

What led me to dig deeper into this?

Well, I’ve been exploring property investments in Liverpool recently, and during negotiations with vendors, I noticed something interesting — the asking prices they’re setting are noticeably higher than historical sale prices.

In fact, valuations have climbed quite a bit, especially over the past 12 months.

It had me thinking.

Why all of a sudden prices have shot up by 15-20%?

That led me into the famous 18 year property cycle by Fred Harrison which I recommend to read for deeper context of the cycle and the different phases.

Fred Harrison’s 18-Year Property Cycle helps us see the bigger picture and it’s where Liverpool’s story gets interesting.

So as you can see from the chart 1, the last major crash in 2008, Liverpool experienced significant price declines during the global financial crisis, with UK average prices dropping 18.37%.

Liverpool's market slowly recovered from the 2008 crash. By 2018, some areas were still struggling to reach pre-crash levels, with Liverpool house prices remaining 1% below their 2008 peak.

Liverpool has entered an explosive growth period (2018-2025), driven by massive regeneration projects and economic transformation.

We’re currently sitting around Year 17–18 of the national cycle, which means the UK market as a whole is nearing its peak.

Prices may still climb into 2026, but many analysts forecast a correction around 2027.

And yet, Liverpool seems to be marching to its own beat.

Prices are up 14% year-on-year, rents have climbed nearly 10%, and investor demand remains strong, with yields averaging 6–8%.

Regeneration projects worth billions are reshaping the city, driving confidence and attracting both local and international capital.

So, is this a bubble?

Or is Liverpool’s boom phase part of a catch-up story years in the making?

Property Listing

Bottom Line

Liverpool is in a fascinating spot within the 18-year property cycle, currently in an advanced growth phase and potentially approaching peak conditions around 2026-2027.

This aligns with the city’s major regeneration and economic transformation.

While the cycle suggests caution near the peak, Liverpool’s fundamentals and regeneration projects may provide added resilience.

The key takeaway

The city is riding a wave of genuine growth, making 2025-2026 a period for strategic investment, but preparation for a potential market correction in 2027 is wise.

What’s Next?

Its Poll Time!

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