• One of UK's best places to live and work (2023)
• Average property prices 15% below UK average
• Fastest rate of private-sector jobs growth of any UK city
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Situated in the thriving northern region of Yorkshire, Leeds boasts a prime, well-connected location that has earned it the reputation of being England's second-largest financial hub. This dynamic city, which fosters a forward-thinking and diverse economy, attracts professionals from across the UK and beyond, making it an ideal place to live and work.
Additionally, Leeds is home to a rapidly expanding student population and a housing market that struggles to meet demand. Given these factors, it comes as no surprise that property investors are increasingly drawn to the exciting Leeds property market, where they discover compelling investment opportunities.
Currently, Leeds is grappling with a substantial housing shortage that is anticipated to endure as the city experiences sustained growth. Despite regeneration initiatives infusing new business prospects and properties into Leeds, the supply is struggling to keep pace with demand—a crucial consideration for Leeds property investment.
As a premier university city with an abundant pool of young graduates, Leeds consistently faces pressure on its rental market. Bolstered by an economy rich in high-end job opportunities, average incomes within the city are steadily increasing. This surge of young professionals capable of paying higher rent positions the city as an attractive prospect for Leeds property investment.
Leeds is the fourth largest urban and metropolitan area in the UK with a population of over 807,000 people as of 2023. The population is expected to continue growing and reach 833,000 by 2024.
Over the last decade, house prices in Leeds have risen by 55%. This upward trajectory is projected to persist, with an additional increase of 21% anticipated by 2026.
Over the past two decades, Leeds' economy has experienced remarkable growth, surging by 146% since 2000 and achieving a current value of just over GBP37 billion. Projections indicate that this upward trend will continue, with an anticipated increase of 42% over the next 10 years.
Predominantly due to thriving industries and a growing population, Leeds’s economy has grown by 108% over the last 2 decades and is worth just over GBP37 billion today. While once primarily known for its manufacturing industry, the city has undergone a remarkable transformation through large-scale regeneration projects over the past decade.
Today, Leeds is a vibrant, modern urban centre focused on fostering high-growth sectors like finance and professional services. As home to four universities hosting over 60,000 students, the city has emerged as a hub for start-ups and graduates seeking to establish their professional careers.
This steady influx of businesses, students, and professionals has consistently driven up the demand for property and rentals in Leeds. However, the city's housing market remains more affordable than those in other Northern cities and continues to outperform the national average for England.
Over the past two decades, Leeds' economy has experienced remarkable growth, surging by 146% between 2000 and 2023 and achieving a current value of just over GBP37 billion. Now home to the UK's second-largest financial sector, Leeds hosts over 30 international banks with significant operations in the city, as well as 150 accountancy firms, including the 'Big Four'—PwC, Deloitte, EY, and KPMG.
Ongoing successes across various industries continue to attract new businesses to Leeds. With the city's economy projected to grow by an additional 83% over the next 15 years, major firms such as the BBC and Burberry are relocating their primary business functions to the area.
Leeds has embarked on several regeneration initiatives, focusing on modernising its transport hub and surrounding areas. The city aims to create a world-class integrated transport hub, combining rail, bus, and other modes of transport, to streamline connections and enhance accessibility from nearby cities such as Sheffield and Manchester.
Over the past nine years, a mere 27% of Leeds' housing needs have been met, resulting in a significant undersupply of homes. Despite the city's economic prosperity contributing to an annual increase of 1,737 households since 2000, the demand for housing remains largely unfulfilled. Taking the backlog of housing units into account, an undersupply of at least 38,130 units is anticipated by 2030.
Fueled by 13% population increase since 2000, which saw Leeds reach over 807,000 residents in 2023, the demand for housing has significantly outpaced supply. This imbalance has driven house prices by 55% over the past decade, and the trend is expected to continue, with an additional 21% increase projected by 2026.
Leeds' rental market is currently experiencing its busiest period on record, with unprecedented demand causing estate agents to report listings disappearing within hours of being posted online. The persistent housing undersupply has prompted more residents to opt for renting instead of buying. As the population continues to grow, the housing deficit is expected to widen further, intensifying the demand for rental properties.
In response to this heightened demand, rental prices in Leeds have risen by 6% over the past six years and are projected to increase by an additional 13% by 2026. This growth rate surpasses the national average of 12% for the same period, making Leeds property investment an exceptionally attractive opportunity for investors seeking to enter the buy-to-let market and achieve a swift return on their investment.
Leeds' vibrant lifestyle and entrepreneurial spirit draw students from across the UK and abroad to the region's esteemed educational institutions. Ranked 55th globally, Leeds features on the QS World University Rankings "Best Student Cities" list. As the home of the University of Leeds, Leeds Beckett University, and the University of Bradford, the city has an ongoing demand for student accommodation, presenting a huge potential for those looking into Leeds property investment opportunities.
Leeds experiences a steady influx of graduates seeking rental properties. Out of the city's large student population, 35% of graduates find employment in Leeds each year following their studies. This young and highly skilled talent pool serves as a key factor in attracting major firms to establish operations in the city.
Leeds holds the distinction of being ranked third in the UK for the fastest-growing firms outside of London, with its tech sector alone valued at £1 billion. This thriving business landscape offers compelling incentives for young professionals to make Leeds their home.
Regeneration projects in the city aim to enhance connectivity through improved transport links and provide substantial floor space for new offices, residential units, and amenities, sparking interest among potential residents. These revitalization plans emphasise eco-friendly working environments, presenting ideal opportunities for investors to develop both commercial and residential properties in the build-to-let market.
Entering the Leeds property market in 2017, IP Global has subsequently brought to market three investment property developments: Centenary House, Lucent Square and The Preston. These strategic acquisitions, totalling a substantial investment sum of USD24 million, reflect the company's astute approach to identifying lucrative opportunities in emerging markets. With a focus on quality and potential for growth, IP Global continues to distinguish itself as a trusted partner, leveraging its expertise to navigate and capitalise on the Leeds property sector.
Leeds is widely recognised as a strong location for buy-to-let investors in the UK. With an average rental yield of apx 4% - compared to London's 3% - the city offers a dependable return on investment.
With a consistently high demand for rentals and a strong graduate retention rate, property in Leeds presents a stable income source for prospective landlords. Moreover, rent prices are projected to rise over the next decade.
As the city continues its current growth trajectory, both its economy and population are expected to flourish, further boosting demand for property in the rental and buyers' markets and creating a better opportunity for those wishing to make a Leeds property investment in upcoming years.
According to Rightmove, the average house price in Leeds last year was £257,023, with terraced properties selling for an average of £185,680 and detached properties fetching an average of £500,796. These averages are lower compared to Manchester and Birmingham, and rent prices also tend to be more affordable.
While Leeds is a more cost-effective city than London, it ranks among the more expensive cities in the North. This can be attributed in part to its growing popularity among young professionals seeking to settle in the burgeoning city. Nevertheless, Leeds continues to attract students as a prominent university city. With a cost of living significantly more affordable than in larger cities, it remains an appealing option for international students.
For property investment in Leeds, several areas stand out due to their potential for good rental yields and the demand from tenants.
Leeds City Centre: Known for its retail centers, leisure, and nightlife, Leeds city center is expanding, offering opportunities in new developments like South Bank Leeds and the Temple District. With a significant student population, the city center appeals to both students and young professionals, promising a vibrant rental market.
Innovation Village and The Majestic: These areas are part of Leeds' urban regeneration, bringing new jobs, homes, and an economic boost. With major projects like the overhaul of Leeds City Station and transformations of city parks, these areas are becoming attractive for affordable housing and buy-to-let opportunities.
LS4 (Burley, Kirkstall): Burley is known for its terraced houses and proximity to universities, making it popular among students and young professionals. Its location, amenities, and green spaces like Burley Park make it an excellent area for rental investments.
LS6 (Headingley and Hyde Park): This area is favored for its mix of densely-packed terraces near the park and more suburban settings in Headingley, suitable for middle-aged professionals and families. Its connectivity to the city and vibrant local economy contribute to high rental yields.
LS9 and LS3: These areas offer a mix of urban and suburban landscapes with excellent transport links and access to green spaces. LS9 includes a variety of residential options from budget apartments to traditional terraced properties, while LS3, close to the city center, university, and hospital, offers high yields due to its variety of accommodations and amenities.
Yes, foreigners can purchase property for buy-to-let purposes in Leeds and the rest of the UK. There are no specific restrictions on foreign property investors acquiring residential or commercial properties to rent out. However, non-resident property investors should be aware of certain factors and considerations before entering the Leeds property market, including obtaining a mortgage, tax, legal considerations and property management.
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