Leeds has been dubbed the “best investment opportunity outside London” with around £30m having been ploughed into the city’s property market in just 18 months.
Accountancy and advisory firm Hentons claim the city is showing significant growth in retail and property investment, which will boost its appeal both in the UK and overseas.
Middle Eastern investors in particular are becoming increasingly keen on Leeds as a place to invest their cash, with strong demand for student accommodation, a weak pound and the increasingly high cost of real estate in London driving the trend.
Nadeem Ahmed, managing partner at Hentons said: “Leeds is seeing some significant developments with major office and retail schemes launching this year.
“These, plus longer term developments like HS2, are driving a spike in interest from investors.
“We are seeing overseas money moving into residential developments around the city core, aimed at students and young professionals.
“This is supplemented by some real opportunity in the office market, where Leeds is still poorly served in the serviced sector.”
The company has seen interest from the Middle East in residential investment opportunities across the city thanks to affordable land and buildings with demand driven by a strong student lettings sector and a weak pound.
Mr Ahmed said: “The weak pound is making investing in the UK look very attractive, especially as the view is that it will rebound.
“And while the London market is expensive to enter and, as a result, offers investors slim returns, Leeds will continue to shine. There is headroom in Leeds, and it’s a relatively stable market.
“We are seeing a new confidence in the City that is underpinning a significant growth.”
Earlier this month Savills residential forecast, seen as one of the most reliable, says that average UK house prices will remain static next year, while in Yorkshire they will fall by two per cent.
In 2018, Yorkshire values are expected to increase by 1.5 per cent followed by a mini boom of five per cent in 2019, which will outperform London’s 4.5 per cent growth.
Growth in Yorkshire looks set to be fuelled by a shortage of housing and a growing population created by strong economic growth in what Savills refers to as the “Leeds region”.
The firm classes this as Leeds, Barnsley, Bradford, Calderdale, Craven, Harrogate, Kirklees, Selby, Wakefield and York.
The population in these areas has grown significantly in recent years.
New home locations
With over 36 hectares of brownfield space potentially available for development and advanced plans for the High Speed 2 railway station, there are major opportunities for mixed use developments on Leeds’ South Bank.
East Leeds Orbital Road, which is set to be completed by 2021, could unlock a major housing development adjoining Swarcliffe and Whinmoor.
Alongside a new rail station, the Orbital Road will also enable further development at Thorpe Park, including 300 new homes and over 1.3m sq ft of office, retail and leisure space.