Home » Leeds Property Investment – The Best Buy to Let Hotspots In Leeds
Leeds Property Investment – The Best Buy to Let Hotspots In Leeds
Located in West Yorkshire, Leeds is one of the largest and most centrally located cities in the UK. Thriving economic prospects, combined with a high demand for living space from potential tenants, make this northern city one of the best areas for property investment UK. There are many valuable reasons to consider Leeds property investment, such as capital growth and the rising rates of rental yields.
Market demand for Leeds property has reached new heights due to a surge in the population. So what are the factors that contribute to the appeal of this city as an area to live, work, and study in, and what are the best areas for property investment Leeds has to offer?
Why invest in Leeds?
The question on a lot of investors lips is – ‘why invest in Leeds?’. Leeds has been quickly making a name for itself as one of the UK’s top property investment hotspots. The Leeds property market was reported to be worth £59.05 billion in 2018, a figure that was up by 4.2 per cent since 2017. Because of this figure, Zoopla recently ranked Leeds number nine in a list of the top ten UK housing markets. So why is Leeds a good place to invest in property? Here are some of the reasons why you should take advantage of the opportunities for buy to let Leeds offers.
A growing population means higher rental demand
The Leeds population stands at around 809,372 as of 2018. A report by Centre for Cities found that the population in Leeds has grown at seven times the rate of London in recent decades, with a population increase of 151 per cent. Not only this, but the level of employment in Leeds is also increasing.
With a higher population comes a demand for more property to be built. This is where property investment comes in, as in order for buy-to-let investors to make consistent returns in a city, there needs to be a significant level of demand. A report from IP Global states that Leeds is struggling to meet housing demands, with 90,000 new homes needed by 2021 but only 60,000 in the pipeline.
A thriving business scene is boosting property investment Leeds
The significance of the business scene in Leeds has a lot to do with this population growth. Leeds is consideredone of the UK’s biggest business cities outside of London. Home to a diverse mix of businesses, this Yorkshire hotspot has something for everyone, attracting tenants that seek residential accommodation. Consequently, leading employers are flocking to the city to take advantage of this influx of new talent.
With more business opportunities comes an influx of young professionals that need high-quality, well-located rental properties. To cater to this demand, property companies are offering new residential developments for investors seeking an investment property for sale in Leeds.
How many businesses are there in Leeds?
There are over 32,000 VAT-registered businesses in Leeds, with a mixture of large, small, and medium-sized enterprises based in the city. Leeds is also home to a number of NHS offices, including NHS England, and houses more than thirty national and international banks, creating employment for over 13,000 people.
Thanks to the strength of its business scene, Leeds generates 5 per cent of England’s total economic output of £60.5 billion and has an economy that’s larger than nine European countries. A number of big names in business have a headquarters based in this city, including Asda Walmart, GHD, Jet2.com, and more.
More high-profile businesses are turning their attention towards Leeds and launching offices in the area. Channel 4, for instance, recently announced plans to make Leeds the location of their second headquarters, alongside their London based HQ.
What industry is Leeds known for?
The industries that Leeds is most known for are the tech sector, the finance sector, the manufacturing industry and the creative industries. Leeds has the second largest financial sector outside of London, along with being ranked one of the UK’s top creative cities and boasting a digital tech sector that’s worth £1 billion.
As the UK’s secondlargesteconomy and second biggest financial sector, Leeds city region is a hotspot for financial and professional services and has been coined the Financial Centre for Excellence by UK Trade & Investment, helping to establish the financial sector of the city, as well as neighbouring cities such as Bradford, Halifax and York.
A reputation as a UK student City
When it comes to property investment, cities with high student numbers and a thriving university scene tend to generate some of the best opportunities for investors. Home to one of the UK’s largest student populations and considered one of the best student cities in the country, Leeds property investment in student accommodation is certainly a worthwhile venture.
How many students are in Leeds?
Leeds has a student population of over 60,000, with more than 38,000 students enrolled in the University of Leeds. Amongst the student numbers in the city, the University of Leeds also welcomes over 9,000 international students from more than 170 countries worldwide.
The popularity of Leeds as a student city not only boosts the success of student property investment but also makes purchasing residential Leeds buy to let properties an equally lucrative option. Many students in Leeds choose to stay in the city after graduation, with Leeds Art University having been awarded the title of ‘University of the Year for Student Retention’ by the Times in 2019.
High rental yields
Rental yields are an important thing to think about when finding a buy to let residential or student investment property. Those who buy property in Leeds will benefit from average yields of 4.29 per cent, with certain Leeds postcodes generating even higher returns. Low property prices combined with increasing rental costs are the reason behind these yields for Leeds property investment. The average house price in Leeds stands at around £178,735, while rental costs have grown by 2.47 per cent.
The yields in Leeds and other cities like Liverpool and Manchester are helping to put the North of England on the map when it comes to buy to let investments. Unlike cities in the South such as London, yields have fallen to a lower rate of 3.05 per cent. With London property prices sitting at an average of £484,173, and rental price growth of -1.12 per cent, it makes a lot of sense for investors to turn their attention towards the Leeds property market.
Regeneration and house price growth
Leeds has come a long way over the years and is now celebrated as one of the UK’s most forward-thinking cities. There are plenty of regeneration opportunities in Leeds, improving the appeal of investments in the city. Throughout recent years investment in traditional forms such as road and rail has helped to enhance the city through the creation of local jobs, along with supporting local businesses by driving growth. Determined and ambitious schemes such as the Northern Powerhouse are injecting investment into the city’s existing infrastructure. Reports show that the economy of Leeds grew faster than London since the scheme was launched at the end of June 2014.
Leeds has several exciting regeneration plans in place, and one of the most major developments is the £161 million master plan for Leeds train station. This will include the introduction of a new platform, two new footbridges connecting to the new HS2 station, and 3,000,000 square foot of commercial developments. This regeneration in Leeds is set to provide a catalyst for the city’s economy, attracting a larger demographic to the city as the expansive plans maximise its appeal to commuters and present a healthier opportunity for investment.
With regeneration comes increased growth, and this is evident in the rising rate of property prices in Leeds. Predictions from JLL reveal that property prices in Leeds are expected to increase by 17.1 per cent by 2023. This shows that for those with capital growth as their main property investment goal, looking for an investment property for sale in Leeds is a good route to take.
Is Leeds a good place to invest in property?
Leeds is a good place to invest in property thanks to the growing population, affordable housing costs, strong prospects for economic growth, and high average yields. Those looking for an investment property for sale in Leeds can expect attractive returns from both rental costs and capital appreciation.
The top 5 Leeds buy to let hotspots
The prospects for property Leeds offers present a good investment option overall, but certain Leeds postcodes come with varying levels of potential. Find out about the best area of Leeds to invest in with these top five Leeds buy to let hotspots.
Armley, Hunslet and Beeston
Average House Price: £137,200
The suburbs of Armley, Hunslet and Beeston, are located to the West of Leeds and are popular with property investors due to their low house prices. These areas mostly consist of terraced houses, which make them ideal for Leeds property investors looking to rent to families.
Yields in this area are around 5 to 6 per cent thanks to the average property prices of £137,200 – lower than the average house price in Leeds. Regeneration plans for the area include the development of a new park which is to be introduced to the South Bank area of Hunslet, helping improve quality of life for residents and boost the appeal of the area.
It’s unclear how much house prices will increase in these suburbs. However, with overall Leeds property growth predictions being so high, it’s likely that house prices will see some significant growth in the Amley, Hunslet and Beeston areas.
Leeds City Centre
Population: 32,300 (Centre for Cities estimate)
Average House Price: £179,183
Perhaps the most popular of all Leeds buy to let hotspots, the city centre is a fantastic area of Leeds to consider for your next property venture. City living most commonly appeals to students and young professional tenants who want to live close to their workplace, university, and the hustle and bustle of Leeds. This means that if you want to target these desirable tenant types, Leeds city centre may be one of the best areas to look to for investments.
Rental yields within the city centre have an average of 5 per cent, while extensive regeneration schemes suggest that this is one of the best areas in Leeds for capital growth. The South Bank Scheme, for instance, includes development plans to extend the city centre and create numerous new homes, shops, offices, and a public park.
Average House Price: £216,734
Headingley is one of the biggest student hotspots in Leeds due to Leeds Beckett University campus. However, the area is also becoming a lot more popular with families and young professional tenants due to the excellent transport links and local amenitifes.
Rental yields can reach as high as 7.4 per cent in the Headingley area’s LS6 postcode, thanks to the strong demand for high-quality accommodation. In 2018, the Headingley Investment Fund was launched – a scheme created by local residents as a way to promote their local community. Other recent regeneration plans include the redevelopment of Headingley Stadium, helping to bring funding and exposure to the area.
Crossgates and Garforth
Average House Price: £254,545
Two separate but nearby Leeds suburbs, Garforth and Crossgates, present excellent property investment potential. Due to strong transport links, these suburbs have a high population of both young professionals and families.
Yields are likely to reach around 5 per cent across the area, while capital growth potential looks high thanks to regeneration plans like the ELOR project. This project involves the expansion of Thorpe Park business park, the introduction of a new railway station, and the development of around 5,000 new properties.
Woodhouse, Burley and Hyde Park
Average House Price: £220,082
Located between the city centre and Headingley lie three popular inner-city Leeds suburbs. Woodhouse, Burley and Hyde Park are popular spots for student property investment, due to the high number of students living in the area. Yields in this area can come to around 5 or 6 per cent but could go even higher for student properties, which are often low priced.
Being so close to the city centre, it’s likely that property prices in Woodhouse, Burley and Hyde Park will increase over time in line with the overall Leeds property price growth of 17.1 per cent over the next five years. For those who want to buy property in Leeds, these inner-city suburbs present a fantastic investments solution.
About our data
The data and statistics we used in this Leeds property investment guide have been gathered from a range of sources. The population figures used in our top five Leeds buy to let hotspots were found from the Centre For Cities and Leeds Observatory population estimates.
Information on average Leeds property prices has been gathered from Go Compare, Zoopla, and Totally Money. Statistics on student numbers have been taken from the University of Leeds and Leeds Art University website.
Choose RW Invest for your next
Have you enjoyed our guide to property investment in Leeds and are interested in making a property investment in the UK? Take a look at this guide to six of our most exciting buy to let properties for sale in the UK, featuring some fantastic Liverpool and Manchester investment opportunities.
If you want to take your first step to investing in UK property with RW Invest, contact us today, and we can help you find your perfect residential or student investment from our range of developments.