Leeds Property Investment Case

The city of Leeds has a combined population of 3 million and a workforce of 1.37 million, with employment rising by 11,000 since 2011. Leeds now has the highest ratio of private to public sector jobs of all major cities outside London; it is expected that over the next ten years, the economy will grow by 21% with financial and business services set to generate over half of GVA growth over that period. Leeds also boasts one of the UK’s largest economies worth over £62.5 billion per annum, a 40% increase over the last decade. The city is also home to the £350 million Trinity Leeds retail and leisure development, the largest of its kind anywhere in Europe, and the £600 million Victoria Gate retail development, which opened in October 2016 brining a flagship John Lewis store to the city.

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 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:

Leeds City Region is well connected geographically, serving as a gateway to Yorkshire’s local and regional destinations. Leeds railway station currently welcomes an estimated 34 million passengers annually, making Leeds the 4th busiest railway station outside of London.

Leeds Railway Station is also the busiest in the North of England with 34 million passengers each year. Leeds City Council has created a Leeds Integrated Station Master (LISM) which will include High-Speed Rail Connections and improve the experience of everyone using the station. There are also plans to have a new, international commercial development in the centre of Leeds, help with regenerating Leeds South Bank which will double the size of the City Centre and have better rail connections in the North, connecting people and businesses to jobs and markets.

Currently, you can access a majority of UK cities in less than 3 hours, including:

• 22 minutes to York
• 53 minutes to Manchester
• 1 hour 50 minutes to Liverpool
• 1 hour and 55 minutes to Birmingham
• 1 hour 19 minutes to Newcastle
• 2 hours 18 minutes to London
• 2 hours 51 minutes to Edinburgh

Leeds Bradford Airport flies direct to over 50 destinations including Greece, Croatia, Italy, and Spain and currently, sees an estimated 4 million passengers a year which is expected to increase to 7 million passengers a year by 2030.

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 been 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.

Leeds Southbank

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.

Leeds Southbank is one of the largest regeneration projects in Europe, aiming to double the size of Leeds City Centre. The scheme is a 253-hectare space, the size of 350 football pitches, and will transform the area into a globally distinctive destination for living, learning, creativity, leisure and investment.

New Briggate

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

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.

The Headrow

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.

A new riverside community and park in Leeds City Centre

Tetley’s Brewery was once a thriving hub of industry and it is now set to become a buzzing community in the heart of Leeds City Centre. The £155 million development will create 850 new homes, 85,000 square metres of office space and 15,000 square metres of leisure space. There will be new hotels, pubs, and restaurants too but the best bit is the new five-acre City Centre park that will stretch from the banks of the River Aire over to Crown Point. Not only will it be a place to relax and socialise, but it will also create a new events space for the city.

Rebirth of Leeds General Infirmary (LGI)

Two new hospitals will be built in Leeds over the next 10 years, as part of the Hospitals of the Future campaign to transform healthcare in the city. The first will expand the critical care services by adding new state-of-the-art theatres and introducing a high-tech radiology department. The second will be a dedicated children’s facility that will bring all of Leeds Teaching Hospital’s paediatric care into one purpose-built unit to create a dedicated space for children to receive the vital care they need.

Riverside regeneration project on Kirkstall Road

A 13.1-site acre on Kirkstall Road that used to be home to a First Bus Depot and chemical works will rise again in the coming years. Latimer Developments have revealed plans for a major mixed-use regeneration scheme on the banks of the River Aire. 1,400 homes form the cornerstone of the project, across flats, townhouses and student accommodation blocks. But alongside living quarters, you can look forward to retail, leisure and commercial space, a new riverside park and a new footbridge, all within walking distance of the City Centre.

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, Leeds house prices have increased by 9.8%.

Due to tenant demand rising and reaching new levels since the pandemic, average rents in the UK (excluding London) have hit a new record of £1,126pcm. This is an annual increase of 11.8%!

Savills forecast average growth of 24.3% for Yorkshire & The Humber property prices by 2026.

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.