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University Cities Worth Investing In

University Cities Worth Investing In

Universities are a major reason that the market for buy-to-let investment in Leeds, Liverpool, Leicester and Bradford make  ‘Northern Powerhouse’ cities looks so attractive. Cities such as Manchester are now seeing post graduate retention rates in the region of 50% which in turn generates around 17,000 students every year being added to the population and seeking quality apartments. This drives up both property prices and rental demand. Good quality apartments offer students secure, comfortable and conveniently-located lodgings. Among the interested investors will be parents looking to house their children for the duration of their studies, and secure themselves a long-term source of income after graduation. 

Let’s take a look at four university cities offering fantastic buy-to-let investment opportunities. 

Leicester 

What once was a hub for textile and shoe manufacturers has been transformed into St. George’s Cultural Quarter. There, Victorian buildings provide a home for the city’s artists and creatives. That’s where our Agin Court two-bed apartments are based. They each offer more than a thousand square feet of living space, with those near the top offering terraces and balconies, to boot. Each is just a short walk from both Leicester University and DeMontfort University.  

Leeds 

Leeds is home to two universities, both of which rank consistently well on league tables and student surveys. Leeds University was named University of the Year 2017 in the Time’s Good University Guide. The city’s regenerated South Bank is attractive to up-and-coming professionals. The Ellerby Road apartment complex boast two-bed apartments, each of which provides 732sq ft of living space, and will be ready to receive tenants soon. The city offers an excellent transport infrastructure, meaning that residents will be able to reach any part of campus via bus. 

Liverpool 

A £4 million investment programme has helped transform Liverpool into one of the UK’s top business destinations. Old Hall Street is a seven-storey property whose central location makes it perfect for urban professionals. Just a seven-minute walk from Liverpool Lime Street Station, it’s convenient for frequent travellers – Manchester is just a forty-five minute train journey away, while London is reachable in around two hours. The city offers a high concentration of universities, with the red-brick University of Liverpool being perhaps the most prestigious. Old Hall Street is within walking distance of a host of bars, clubs, restaurants and shops – including the world-famous Cavern Club where the Beatles made their name. 

Bradford 

Bradford’s student population is among the country’s youngest, which makes the city’s future appear especially bright. The city centre has witnessed explosive growth in recent years, with hundreds of shops, bars and restaurants opening. Our York House apartments are located near Bradford College and the University of Bradford, making them an ideal residence for new students. They’re also easily reachable via the nearby Canal Road. Bradford city council have created ‘growth zone’ incentives to encourage the development of the city centre – which can only be a good thing for the value of nearby properties. 

Why are University Cities worth Investing In? 

Having completing their studies, many students will have formed an attachment to the cities in which they’ve been living for three years or more. They may have formed lasting friendships and romantic attachments, and so be unwilling to move away. Thus, those that don’t choose to go onto a postgraduate degree (or move back in with their parents) will often move into full-time employment in their university city. 

The rate of graduate retention varies enormously from region to region. This rate depends on many factors, but the availability of high-quality accommodation is inarguably key. While many landlords might hesitate to deal with students, highly-skilled young graduates they become will drive local growth, which makes investment in university cities more palatable. 

It won’t surprise many readers to learn that, according to the latest HESA Destinations of Leavers survey, the biggest winner is London – but some of the so-called ‘Northern Powerhouse’ cities aren’t far behind, with a retention rate hovering at around two thirds. As such, such cities contain some of the best UK property investments, and are well worth investigating! 

 

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SOYO increases the investment potential around Victoria Gate, Leeds

Leeds’ newest district SOYO, or SOuth of YOrk road, will be the city’s new cultural district. The attention of property investors has been drawn to this area of Leeds city centre, as the area has undergone vast redevelopment with the construction of Leeds’ newest luxury shopping centre Victoria Gate, the home of John Lewis. The district will be built adjacent to West Yorkshire Playhouse, Leeds College of Music, BBC studios, Northern Ballet Head Quarters and is set to become a key development in the regeneration of Leeds City Centre.

Leeds’ New Cultural Quarter

The SOYO proposal includes 106,000sq ft of offices, 35,000sq ft leisure, in excess of 700 residential units, a multi-storey car park, 7,500sq ft retail facilities, a medical centre and a series of vibrant public squares. This type of redevelopment is contributing to long-term economic growth in this area of the city centre and is essential for property investors to be aware of when considering capital growth potential of the property.

West Yorkshire Playhouse

The West Yorkshire Playhouse, which opened in 1990 is set to have a £14 million facelift. Redevelopment will include a brand-new entrance, studio and improvements to the buildings interiors for the thousands of visitors they host every year to enjoy. The Playhouse is a big pull for tourists for the city and was shortlisted for a top tourism award in the Arts & Culture category as part of the prestigious Welcome To Yorkshire White Rose Awards.

Transport

The city’s transport system is well positioned for access in and out of the SOYO district. Tenants will have a 6-minute walk to the bus station and 10-minute walk to the train station. Generally, Leeds is one of the most well-connected cities in the UK with exceptional rail, air and road links. London is just two hours away by train and one hour by air. Major roadways including the A1, M1 and M62 are in the vicinity, bringing drivers right into the city centre.

Infrastructure Investment

Within the immediate vicinity of the development is the completed Victoria Gate, a new £165 million luxury shopping centre which is also home to the largest John Lewis store outside of London. The true value of Victoria Gate has been revealed as it is expected to attract over £82.5m of inward investment to Yorkshire during its first 10 years. It’s no surprise then that the economy of Leeds ‘grew faster’ than London since Northern Powerhouse was launched back in 2014.

Investment into the Education Sector

A key growth area for development in Leeds is in the education sector. The city is already served by three universities and has the fourth biggest population of students in the UK. The crane survey recorded four new starts in 2017 adding over half a million sq. ft into the development pipeline. This included Leeds City College’s Quarry Hill campus and developments at both the University of Leeds and Leeds College of Building.

From Students to Young Professionals

Rental potential and longer-term capital growth is strong as more graduates are staying in the city to work in its growing financial, technology, professional services sectors. Three major universities support a thriving student population who are encouraged to stay in the region by more affordable house prices than in the South East ensuring high rental demand and healthy yields for landlords. House price growth in Leeds was at the highest in the UK, with average growth of 5.7% in 2017.

Financial Quarter

Leeds is the second largest financial city after London and has an economy worth £64.6 billion. There are over 30 national and international banks in the city, with First Direct and Yorkshire Bank basing their headquarters there. The city is seeking to establish itself as a strong Northern centre for financial services. A report from law firm Irwin Mitchell said Leeds has expanded its financial sector substantially in recent years, with the city’s total output from finance and insurance increasing by 40 per cent between 2012 and 2015.

Comparing the Northern Powerhouse heavyweights

The key to Northern Powerhouse success is ensuring the sometimes neglected city regions are able to realise their economic potential. The task isn’t a small one and the Northern Powerhouse government minister is committed to balancing the UK’s economic output. Some positive outcomes of this focused strategy are emerging, as the Northern Powerhouse regions have seen inward investment increase even faster than the UK average. According to EY’s latest UK Attractiveness Survey, the north-west region attracted 90 foreign direct investment (FDI) projects in 2016 – 60 per cent of which were first time investments in the region.

Centre for Cities has compiled data on 63 of the UK’s cities to understand and improve economic performance. So how do the cities of Leeds, Liverpool and Manchester compare when it comes to house prices, employment, GVA and graduate retention, all key factors for buy-to-let investors.

In the report, mean house prices in Manchester are £175,419, whilst in Liverpool they are lower at £131,046. In Leeds the mean house price is the highest at £186,206, although when you take population growth and demand for property into account, it is evident that Manchester is a good choice for investors as the population size in 2015, placed Manchester 3rd out of 63 cities in the UK.

The Centre for Cities research also took into account graduate retention rate, or graduate gain. Graduate retention gives an indication of a city’s ability to retain newly qualified graduates based on job prospects, wages and quality of life. Leeds graduate gain is the 3rd highest of all UK cities, whilst 50% of students who left Liverpool for university subsequently came back to work after graduation.

Please note:

* The cities are ranked in order out of 62 or 63, dependent on the criteria, with places closer to 1 at the top of the list.

* “The Centre for Cities uses data for Primary Urban Areas (PUA) in its analysis. This is a measure of the “built-up” area of a city, rather than individual local authority districts. PUAs are used in our analysis because they provide a consistent measure to compare concentrations of economic activity across the UK. This makes PUAs distinct from city region or combined authority geographies.”

Yorkshire races ahead of other UK regions for employment growth

Yorkshire is already known as a prime location for business investment and expansion and news has been released that the county saw the quickest rise in employment in the UK in June, according to the latest Lloyds Bank Regional PMI report.

Yorkshire also had the second-fastest expansion in business activity in the UK in the same month, with output rising for the eleventh month running.

Optimism is particularly high in Leeds City Region’s business community and for good reason. The city combines great access to regional and national markets, great quality and excellent value for money office space. The city is growing and property investors are encouraged enough to look outside of the city centre at the areas which have been attracting commuters who have been priced out of the city centre.

The scale and diversity of the Leeds economy is key to its success. It centers on financial, legal and professional business services, a vibrant visitor and leisure economy, plus expertise in healthcare technologies and high value manufacturing.

Leeds City Region is home to the UK headquarters of a number of international businesses such as: Asda Walmart – supermarket chain; Capita – a FTSE 100 listed company concerned with business process outsourcing; CYBG plc – Major UK banking group; GHD – global HQ for hair fashion company; Jet2.com – a low cost airline; and Sky Betting & Gaming – betting and gaming company has headquarters in Leeds city centre.

As the home of these many international businesses, the region manages to keep a fairly good student retention rate after university, but students at Leeds Trinity University, the standout institution, are more likely to stay in the region after graduating, with 78.7% being employed in the Yorkshire and Humber region.

Leeds sits at the heart of a wider city region with an economy worth over £62.5 billion per annum and the city’s economy has grown almost 40% over the last decade. Since 2011, employment has risen by 11,000 and Leeds now has the highest ratio of private to public sector jobs of all major cities outside London. With this growth in the city, property investors are assured of the return on their buy-to-let investments and are now looking just outside of the city centre for apartments which appeal to tenants because of slightly lower rents than the city centre but that can still take advantage of the city’s good public transport network.

Victoria Gate: How a shopping centre transformed Leeds into a world class shopping destination

For savvy property investors, analysing a city’s house price growth is only one factor in making an investment decision. With high house price growth, Leeds has remained an excellent UK investment hotspots, outstripping London since the Brexit vote. The recent development of Victoria Gate, a luxury shopping centre that brought John Lewis to the city, has further proved Leeds’ investment potential.

Leeds’ Victoria Gate is a great platform for the retail brands to expand their portfolios outside London. Here’s why it has been getting investors so excited:

  • The centre has attracted four million visitors since its opening day

  • It was named the world’s Best Shopping Centre at the internationally renowned real estate competition the MIPIM Awards

  • A 255,000 sq ft John Lewis store has opened, representing a £37m investment. Plus it’s one of the biggest John Lewis department stores outside of London

  • Two new rooftop restaurants operated by D&D are poised to open on site shortly including a Japanese restaurant called Issho

  • A New York loft-style bar called East 59th is due to open in the summer

  • A new 50,000 sq ft “super casino” opened early in 2017.

Besides the great economic impact bought by the Victoria Gate, Leeds is also home to the UK headquarters of:

  • Asda Walmart – Supermarket chain

  • Capita – FTSE 100 listed company concerned with business process outsourcing

  • CYBG plc – Major UK banking group

  • First Direct – A subsidiary of HSBC

  • GHD – Global HQ for hair fashion company

  • Jet2.com – Low cost airline

  • Sky plc – Customer care and digital development

  • Sky Betting & Gaming – Betting and gaming company has headquarters in Leeds

  • Yorkshire Television – A subsidiary of ITV plc

Victoria Gate is just one example of how partnership between the public and private sector is at the heart of Leeds’ approach to major regeneration. The effect has been readily seen and felt over the last ten years. Smaller scale initiatives have focused on reinvigorating town and district centres with the aim of realising the city’s ambition to become the best UK city by 2030.

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