With the uncertainties of Brexit looming over the property market, house prices in Leeds and Yorkshire still rose +3.3% in the last financial year, compared to significant dips in prices in the Capital. London, by comparison, dropped -0.7%. This study, as published in the Financial Times, highlights the comparison of the effect of Brexit on the housing market in London compared to the North. So, why is Leeds continuing to grow despite the decline in prices in the South?
The city of Leeds has continued to grow not just in terms of size, with the SoYo development and the regeneration of Leeds Southbank, but also in its reputation within the U.K. economy. As the U.K.’s largest financial district outside of London, the Leeds economy is estimated to be worth £21.3 billion per annum. The city’s economy grew by 34% during the last decade and is forecast to grow a further 21% over the next ten years – with financial and business services set to generate more than half of GVA growth over that period. Leeds has grown so much in recent years to set it as the global player in the economy that it
is today, and the city is set for even further success over the next decade. This means that now is a great time to invest in property in Leeds. Now is the perfect time to find a Buy to Let investment in the city as the rental demand is so high, and the capital growth on a property you buy now is set to rise in line with the economy of the city over the next decade and more.
While the property sales market in Leeds is currently booming, the rental market is just as strong due to the changes in the way we are living. Young people are renting for much longer than ever before as we struggle to save for mortgage deposits. Having to work in the city centre in order to earn enough to eventually do so means that rental demand has soared over the last few years. This is especially evident in the demand for one- and two- bedroom high specification flats as we have seen many young professionals desiring a luxury lifestyle in the city centre.
The growth in city centre living has increased exponentially in recent years. From 2001 to 2011 the city centre population increased by 150%, and has continued to grow since then. The number of 20 to 29 year olds in the centre of large cities tripled in the first decade of the 21st Century, to a point where they made up half of the population – and three-quarters of these young professionals were renting flats and apartments. This trend has stayed in Leeds as a thriving and popular city that is home to three prestigious universities, attracting high volumes of students and professionals each year.
Numerous banking, legal and retail giants currently occupy the city as major employers, such as KPMG, Deloitte, DLA Piper, Addleshaw Goddard, and ASDA and this employment hub is an enormous factor for the high rate of graduate retention from these universities. With so many of our young professionals working for these national and international companies, many need the flexibility to move at short notice, which is another factor in the popularity of city-centre renting as opposed to buying. This furthers the necessity of these apartments for the ‘renting generation’ with the retention of students from Leeds’ high student population staying to work in the city – thirty per cent of graduates from the year 2015 stayed living in the city over the next three years to work.
Young professionals have been flocking to Leeds to work in these sectors for many years, but in recent years the creative sector has also surged in popularity. This year, Yorkshire was named as the UK’s hotspot for up-and-coming innovative young companies in the film, media, games, and technology businesses. The creative side of Leeds is another bow to the city centre that attracts and keeps many young people living here. With numerous independent shops, cafes and restaurants, the creative hub of Leeds is continuing to grow.
On top of this, last month Channel 4 announced that they have chosen the city as the new location for its headquarters. The move of this broadcasting giant is set to create 200 jobs in the city, and thus will even further the demand for one- and two-bedroom flats to rent in the city as the media hub grows and brings with it more employment opportunities.
The renting generation is set to stay as a trend for millennials who need to live and work in the city centre but are not ready to commit to buying a property due to financial, location or employment-related issues. Leeds has grown into an increasingly popular and lucrative city for graduates and young professionals
and will continue to attract more as these employment opportunities multiply. With rented flats in Leeds at 99% full occupancy long-term, this shows the need for further new-build schemes to fulfil the demand of city centre living that this new generation of successful young professionals are creating such a thriving market for.
If you would like help finding your perfect investment opportunity, please contact us at Smart Investment & Management Ltd on 0113 887 8158. www.smartim.co.uk