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Leeds housing crisis: Rents set to rocket as crisis deepens for many
BUOYANT RENTALS MARKET: Andrew Stevens, lettings manager for city centre living specialist Cityred.
A special YEP investigation is looking at the impact of the Leeds housing crisis. Vicki Robinson reports on the return of renting – and warns of a looming price hike.
Only a year ago, some observers were claiming that city living had reached saturation point.
There would never be, they claimed, enough demand to fill the multitude of city centre apartment developments which had sprung up across Leeds.
And, until the economy crashed, they might have been right.
Today, though, the city centre landscape paints a very different picture.
According to estate agents, more than 90 per cent of the flats in the city centre are now occupied – a large number by renters who, had the financial crisis never happened, would have been well on their way to buying their own home.
As it is, with such high deposits demanded by mortgage companies, many people expect to be trapped in a cycle of renting for years to come.
Andrew Stevens is the lettings manager at Cityred, which specialises in city centre living.
Of the 70 properties it has on its books, all but one is currently occupied.
Andrew said: “I’d estimate we have around a 95 per cent fill rate and that’s a figure we’re seeing across the city.
“It’s simply largely due to the recession. Young professionals who lived in the city centre for a while and then wanted to move out to the leafier suburbs just aren’t able to.
“They can’t get mortgages because they haven’t got the £20,000 or £30,000 deposits they’re being asked for.
“Instead, people are delaying having their families and are deciding to stay in the city centre, to rent and enjoy that sort of living for a bit longer.”
He said it was a common misconception that scores of city centre flats were lying empty.
He said: “That might have been the case a couple of years ago. Rents took a real dip. Flats that were around £650 could be had for about £475. People were able to barter because the market was swamped.
“Now, though, we’re seeing a return to those higher prices.”
Experts at the National Housing Federation predict that over the next five years, because of the huge demand for rental properties, rents are expected to rise by about 20 per cent.
Currently a studio apartment in Leeds costs between £450 and £500; a one-bed apartment is £550 to £650; and two-beds go for anything from £650 to £2,000.
And while people are paying those sorts of rents it is very difficult to save for a deposit – as Mr Stevens himself knows.
He and his fiance have their hearts set on a house in Adel, north Leeds, but have resigned themselves to saving hard for the next 18 months to get together the deposit they need.
Mr Stevens said: “We know where we want to be and we probably could move into a smaller house now.
“But in the next few years we want to start a family so we would end up moving again and we could lose out.
“Instead we’ve decided to save as much as we can in the hope of buying the house we want to stay in for years to come.”
Jonathan Morgan, the boss of Morgans in Leeds, agrees that the rental market is buoyant.
He said: “The city centre in terms of occupancy is miles more occupied than it ever has been. It’s approaching 99 per cent.
“There are more people living in the city centre than there have ever been.
“When there is more demand than supply it puts pressure on rents.
“The implications are that ultimately if people want to rent and the amount of rented property isn’t available then rent will rise, meaning some people will be excluded from the market.
“Because of the shortage of rental flats at the moment we are offering people one, maybe two options if they are lucky and they are having to be flexible with location and budget.
“The majority of people will want to buy but it’s impossible so they have to rent.”
One indication of the increased demand for rented accommodation is the planned refurbishment of Crispin House, on the corner of North Street and New York Road, in the so-called Northern Quarter of the city.
The building is to be transformed into 82 apartments – all of which will be for rent, not sale.
Development surveyor Richard Baker, of Rushbond Plc which owns the building, said: “Crispin Lofts is a reaction to market conditions. There is a clear strong demand for apartment rentals in the city centre.
“I don’t think the demand and supply imbalance is too much under pressure but people may have to compromise.
“The sales market is still limited in terms of demand which is the reason for the high levels of rental.”
Mr Morgan added: “We are starting to see one or two developers dipping their toe into building specifically for the purpose of renting.
“Crispin Lofts is a reaction by a developer that the rental market is strong and growing.
“It is the first of that type of scheme for many years and it is much needed.”
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