Leeds Buy to Let Property Investment Case
Leeds Property Investment Case

Employment:


Leeds has a large working population which is expected to grow over the next few years due to a number of large businesses moving to Leeds and huge regeneration projects creating new opportunities in the city.


The city has the third largest jobs total by local authority area with 480,000 in employment and self-employment at the beginning of 2015; with more than 6,000 small and medium-size enterprises and over 32,000 VAT-registered businesses based in Leeds accounting for more than half of employment. With such a large workforce boosting tenant demand and therefore increasing rental prices, Leeds is a great opportunity for buy to let property investment.


The high number of employment opportunities are driving more people to the city and further increasing demand. However, with this large increase in demand is a lack of supply. Thereby, creating a perfect buy to let property investment opportunity.


The number of mid-size and large companies and organisations based in Leeds is significantly above the national average and according to new data on business ‘scale-ups’ – companies which have achieved three years of 20% growth in revenues of employees – Leeds is one of the UK’s foremost centres for fast growing firms behind only London and Cambridge. This significant growth is encouraging more employers to move to Leeds and bring an abundance of opportunities with them.


In 2016, Leeds saw the fastest rate of private sector jobs growth of any UK city and has the highest ratio of public to private sector jobs of all of the UK’s Core Cities. A number of major companies are based in Leeds including Asda Group, First Direct, Centrica, Ventura, BT, Direct Line Group and Yorkshire bank – all of which employ more than 1,000 people.


Skybet has also invested heavily at Allied London’s Leeds Dock, where it employs 650 staff in its new centre for digital and technology services. There are also a number of huge opportunities for employment in Leeds with Chancellor Rishi Sunak revealing in this year’s budget that the UK’s first ever Infrastructure Bank will be based in Leeds. Additionally, when HS2 arrives in the city, 40,000 extra rail industry and related sector jobs are predicted across the Leeds City Region by 2050. With all of these new opportunities in the city, there will be a surge of demand from young professionals who are coming to Leeds to work. Therefore, now is the perfect time for a a buy to let property investment.


Education:


The city of Leeds is home to three internationally recognised universities and has one of the largest further education colleges in the UK. The New Leeds City College campus being developed on Mabgate to include top quality sports, education and residential facilities. The plans include a new community space, in the form of a multi-use games area and it is hoped that this will act as a catalyst for investment in the local area. With the current and future education opportunities attracting high levels of interest internationally; we expect the student population to rise significantly from university and international students looking to study in Leeds.


Leeds also boasts Europe’s largest teaching hospital trust. Leeds Teaching Hospitals are going to build two new hospitals over the next ten years as part of their new Hospitals of the Future campaign. This campaign represents a £450 million investment in Leeds.


Leeds Southbank is also home to a developing educational cluster, which includes new campus buildings for Leeds City College, Leeds college of building and UTC Leeds; the city’s first university technical college. This high level of investment will generate new opportunities in Leeds. These new opportunities will bring a surplus of young professionals, post-graduates, and students to the city. Further increasing tenant demand and pushing up rental prices. This increase in rental prices will create a great buy to let property investment opportunity.


Transport & Connections:


The city enjoys great connections to other major UK cities; by train it takes 30 minutes from Leeds to York, 50 minutes from Leeds to Manchester and only 2 hours to London. If you were to drive, it would only take you 25 minutes to reach Leeds Bradford Airport (LBA). LBA connects Leeds with more than 20 countries. With short travel times to major UK cities and strong international connections; Leeds is a prime location and is perfect for buy to let property investment.

Regeneration:


Leeds has undergone multiple regeneration projects over the years with more than £3.9 billion invested in large scale development projects over the last decade. There are still a number of projects yet to come. There is a further £7.3 billion worth of development under construction and in the pipeline. This regeneration and investment will boost capital growth in the city, creating a prime opportunity for buy to let property investment.


A total of 460,000 sqft of new office space is currently under construction and over 700,000 sqft was completed in 2016 – the highest level for over a decade according to the 2017 Leeds Crane Survey.


Key developments for Leeds that have completed include No.3 Sovereign Square, a 93,000 sqft office development by Bruntwood; MEPC’s No.5 and No.6 Wellington Place and the 200,000 sqft Central Square in the city’s West End.


Major office developments currently under construction include the refurbishment of Merrion House and the redevelopment of Platform, formerly City House, above Leeds Central Station.


The Southbank expansion will be the base for UK and regional headquarters of firms such as Asda, Eversheds, Ernst and Young and DWF. Leeds Southbank will improve transport connectivity and new linkages via the southern entrance to Leeds Railway Station which will act as a catalyst for further development of the area, which presents one of the largest opportunities for city centre regeneration and growth in Europe.


New Briggate has been awarded £1.3 million from the High Streets Heritage Action Zone programme. A large chunk of the money will be spent on iconic buildings like Leeds Grand Theatre, Grand Arcade and St John’s Church. Money has also been allocated to improving energy efficiency and commissioning local artists to transform how the area looks.


Northern Civic Quarter will also be seeing regeneration with the former City of Leeds School Building being turned into a new hotel with a second to follow on its former car park. The Leonardo and Thoresby Buildings will become interlinked sites to create 53,000 sqft of office and leisure space.


There is also going to be a new city centre park on the old Tetley’s Brewery from a £155 million redevelopment. It will stretch from the banks of the River Aire all the way down to Crown Point Road, with a new bridge between Sovereign Square and Leeds Station. This project is now one of Europe’s largest regeneration programmes and is due for completion in 2023. It will include 850 new homes as well as 85,000 square metres of office space, 15,000 square metres of leisure space and a new 400-bed hotel.


The Headrow will be undergoing a significant transformation due to the £20.7 million makeover is going full steam ahead. It comes as part of the wider £174 million project to upgrade public transport and improve the public realm across the city.


There are also plans for a green walkway in the heart of the city. Iconic cities such as New York and Paris are known for having one and now Leeds is going to be on the list with a garden walkway linking the Southbank to the West End. Expect a host of new shops, bars and restaurants as part of a wider mixed-use development surrounding the viaduct.


All the exciting regeneration projects will bring new opportunities and make Leeds a more attractive place to live. We expect this to boost the population and thereby increase demand, creating an ideal buy to let investment opportunity.



Leeds Housing Market:

 

Leeds is a great city for buy to let property investment; over the last 12 months, apartments in Leeds have experienced a 1.76% price growth, and a 14.61% price growth over the past 5 years. More specifically, apartments that are found in the LS1 postcodes have experienced a 2.88% increase over the last 12 months, and a 16.45% increase over the past 5 years. (according to Zoopla – March 2021 - https://www.zoopla.co.uk/house-prices/browse/west-yorkshire/leeds/?q=Leeds

The average apartment price in Leeds is £149,621, or £243,084 in LS1, a significant comparison to the Yorkshire average of £126,887. (according to Zoopla – March 2021 - https://www.zoopla.co.uk/house-prices/browse/west-yorkshire/leeds/?q=Leeds

 

The projections for Yorkshire are:

 

2021

2022

2023

2024

2025

5 years to 2025

4.5%

6%

5.5%

5%

4.5%

28.2%

(according to Savills - March 2021 - https://www.savills.co.uk/research_articles/229130/311753-0

With such a bright future for the Leeds property market, now is the best time for buy to let property investment. If you are interested in learning more about investing in Leeds, then contact one of our property investment consultants today.