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Leeds living boom may be about to bust
The city living boom in Leeds is stalling, a report has warned. Click here for full details.
Property adviser DTZ questions whether there is a need for the 13,000 homes on the way for the city centre.
Many of those may never be built, or turned to other uses, says a DTZ expert.
The report says there has been a "steady decline" in investor interest in the city due to "stagnant" rental levels and that the number of owner-occupiers has not filled the void, partly because of increasing supply and rising interest rates.
And it also blasts Leeds City Council for not creating the right conditions for family living to thrive in the city centre.
The report, drawn up on behalf of the Home Builders Federation, says there are 6,300 homes in the city centre and 2,500 under construction.
Another 10,800 are in the pipeline – 7,800 have planning permission. But the report says there is a "question mark" over the need for so many.
Council Tax data for Leeds city centre shows that only 65 per cent of existing homes are occupied and the report says high vacancy rates are set to continue.
Phil Roebuck, residential director at DTZ in Leeds, said: "We aren't saying there is an oversupply – but there could be if all 10,000 proposed units are built. At the moment that doesn't look likely because the developers rely on off-plan sales from investors to get funding from the banks and the investors aren't around in the same numbers.
"The probability is that a lot of the proposed schemes will not be built or will have alternative uses."
The report also suggests council plans to introduce families into the city centre will flounder.
Mr Roebuck added: "The council's plan to develop family accommodation in the city centre sounds like a good one but, in reality, families aren't interested because there are no schools and no green spaces.
"Essentially, the city centre will continue to be a niche market for singles and couples."
Coun Andrew Carter, council deputy leader and executive member for regeneration and development, conceded there was a "market fluctuation" at the moment which was apparent all over the country.
He added: "DTZ's report is interesting but very contradictory and once again it smacks of publicity seeking headlines rather than facts. The facilities to support families living in the city centre will only follow that accommodation being created and that is what is already happening in the city centre."
David Waddington, spokesman for the city's best known developer, K W Linfoot Plc, admitted some of the concerns expressed in the report were justified when considering residential development in many cities within the UK.
"However Leeds is unique and the right developments in the right locations will buck the trend. Leeds continues to attract labour intensive business employers in the service, IT and business sectors who, in turn, attract a workforce who want to live and work in Leeds city centre.
"Rental voids are often in peripheral locations – the quality and location of the scheme is fundamental."
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Friday 25 May 2012
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