Economically vibrant and at the heart of the Northern Powerhouse, Leeds is a magnet for bright young things looking for jobs, shopping and nightlife.
Living in LS1 is a big part of the dream but finding a home in the city centre is becoming increasingly difficult. Rental property, which starts at £550 for a one-bedroom flat, is hard to find and there is little for sale.
“We are desperately short of rental stock and it’s the same everywhere. In the last three years there have been virtually no apartments built in the city centre and demand is rising. We have a growing economy and a growing population we haven’t got enough property to satisfy demand,” says Jonathan Morgan, of sales and letting specialists Morgans.
“The number of resales has also doubled this year and there is a lot of pent-up demand from buyers.” The need for more apartments in the core of the city centre is unlikely to be met thanks to competition from commercial property. The office market is buoyant and offers better rental yields than residential.
The good news is that there are more new homes on the way as developers push out of the city core, although the first tranche won’t be ready for occupation until early 2017.
A brisk 15-minute walk from City Square, Holbeck Urban Village finally looks set to become a vibrant reality. The Round Foundry media centre kick-started regeneration but other developments were crushed by the recession, leaving a wasteland of derelict sites.
Now the area is about to be transformed into the city’s most fashionable place to live thanks to a combination of new jobs, shops and homes.
Work starts next year on a new £50m weaving mill for designer fashion firm Burberry. The factory, which includes the regeneration of Temple Works, will open in 2019 with about 1,000 staff.
In Spring 2016, construction firm Carillion, in partnership with the government’s Homes and Communities Agency, will begin an £80m transformation of Tower Works. The historic building on Globe Road will boast a cinema, microbrewery, offices, shops and 147 flats and townhouses.
Igloo will start on the Iron Works in February next year. Designed by Nick Brown Architects, it includes 58 one, two and three-bed apartments, 15 townhouses and retail space and will be ready for occupation by early 2017.
“The Round Foundry has sat there isolated for years. The new developments, especially Burberry, are the shot in the arm that Holbeck needs. It will help regenerate that whole area,” says Jonathan Morgan.
On the opposite side of the city centre, Leeds-based developers CITU is planning to build more than 300 timber-clad eco homes in Hunslet. The six acres of brownfield land at Low Fold, off East Street and South Accommodation Road, will include houses and flats. A riverside promenade and a new bridge across the River Aire will link the properties with the city centre.
All the new schemes will feature townhouses, which should help balance the city centre’s demographic.
“We have started profiling our tenants and it confirms that we have a very young population. The townhouses will help us retain older tenants and buyers who move from flats to a house in the suburbs,” says Jonathan, who says that the Private Rented Sector schemes could also emerge on the city centre fringe in the next few years.
PRS developments, where large institutions, such as pension and insurance firms, fund apartment blocks for long-term rental investments, has targeted Manchester and Liverpool, where cheaper land is available.
“We will probably end up with some PRS, most likely on the old Yorkshire Post site on Wellington Street, but they are not as viable here as they are elsewhere and that’s not a bad thing. It means our cityscape won’t be shaped by the weight of institutional money,” says Jonathan.
Out in the Leeds suburbs, supply and demand is also an issue.
Mark Manning, sales director of Manning Stainton, reveals that there are just under 3,500 properties on the market at the moment.
“This is alarmingly low and to find similar numbers to this you would have to go back to 2003 to find anything resembling the present shortage. The norm for our market place is around 5,000, so right now we have 30% less choice out there for those thinking of buying. That, of course, has had the inevitable effect of pushing prices higher.”
A good example of this was a property on the Ring Road in Moortown. The four bed semi was under offer for £280,000 in November 2014. The sellers then decided not to move but put the property back on market this autumn and have just sold it for £325,000.
“That’s an increase of around 14%,” says Mark. “In general, I think house prices have increased by around 12% in most parts of Leeds this year.
The lack of supply had turned would-be buyers into tenants and this has pushed rents up. Average rents across the UK are around 6.5% higher than they were 12 months ago and void periods for properties at an all-time low.”
According to Mark, the market is settling down and he predicts lower house price inflation next year.
“Right now prices are struggling to move up much further, which I think is simply down to affordability,” he says. “Next year I expect growth to continue with around a 6% increase but it will be interesting to see the effect of a potential interest rate rise and the possibility of an EU exit.“