Property Investment Leeds: The Complete 2023 Guide

Chapter 1 of our guide will cover six reasons why investing in Leeds is a good idea in 2023.

We’ll be taking a look at the latest urban regeneration initiatives in the city, affordability of house prices, and more.

Key topics:

• Affordable house prices
• High rental yields
• Huge rental demand
• Massive urban regeneration

One of the primary reasons behind Leeds property investment’s reputation as one of the best areas to invest in property  has been its affordability.

According to the latest property data from the Land Registry, the average house price in Leeds is valued at just £240,316 as of January 2023.

For comparison, that is 20.60% cheaper than the UK average, with detached houses, semi-detached houses, terraced houses, and flats all cheaper in Leeds than the UK average.

The average house prices in Leeds show that rental property in the area can compete with the most prominent cities and offers good value property in Leeds.

A big appeal behind property investment in Leeds is the massive house price growth set for the coming years.

According to the latest Savills predictions, the Yorkshire and the Humber region is set to see house prices soar by 11.7% by 2027 – this is the joint-highest predicted growth rate in the UK alongside the North West and North East.

Looking back at the past year, it’s clear that this growth is unsurprising.

Over the last 12 months, property prices in Leeds are 9.37% higher than a year prior.

This Leeds property prices trend has continued throughout the last three years, too, with prices rising by 28.64% since the start of the Covid-19 pandemic.

While residential property is always a popular choice amongst UK property investors, if you want a good value property with high returns, then student accommodation is an excellent choice.

Luckily for prospective Leeds property investors, the city of Leeds offers plenty of opportunities for student investment property for sale thanks to a thriving young population.

Home to one of the largest populations of students in the UK, and widely 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 39,000 students enrolled in the University of Leeds alone in 2023.

The popularity of Leeds as a university city not only boosts the success of student property investment due to the high demand for student accommodation but also makes purchasing residential buy-to-let Leeds 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.

With 2023  seeing the second-highest number of university applicants across UK cities on record, the future definitely looks bright for investments in student cities like Leeds.

Check out our ultimate student property investment guide to learn more on this.

In Chapter 2 of our guide, we’ll be taking a look at the 2022 Leeds buy to let property market in a bit more detail.

Here, you’ll find an analysis of Leeds property prices over the last few decades, population statistics of Leeds property investment, and an in-depth look at the latest property price predictions for this Yorkshire city.

Key topics:

• Leeds Property Prices 2020 to 2023
• Leeds Rental Market Analysis
• Leeds Property Price Predictions 2023-2027

Market Summary:

• Rental market demand increased by 11% in 2022 – the highest increase in the UK, according to Zoopla.
• The average Leeds rent is £256,765 PCM on Zoopla.
• Over 30% of the Leeds population are aged 15-34.

When it comes to Leeds property investment, the city’s rental market is one of the most thriving in the UK.

Currently, the average Leeds rent is £1,580 PCM, according to Zoopla, which is over £500 higher than the national average of £1,059.

In the last year alone, rental values in the Yorkshire region have increased by 8.2%, and this is likely stemming from the massive demand seen in the city.

This demand is caused by the rising Leeds population, which is significantly made up of young people.

According to statistics from the ONS, around 30% of the population are aged 15-34.

This is vital for the future of a city’s rental market, as young people make up the majority of renters.

For this reason, investors should aim to target cities with a primarily younger population when targeting buy-to-let.

So, why is the Leeds population growing at such a strong level?

Well, primarily, the biggest attraction to Leeds for young people, aside from quality universities, is the exceptional business scene.

Leeds is considered one of the UK’s biggest business cities outside of London.

Home to a diverse mix of businesses, this Yorkshire hotspot has something for everyone.

Consequently, leading employers are also flocking to the city to take advantage of this influx of new talent.

With more business opportunities comes an influx of young professionals who 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 that offers regular rental income.

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 30 national and international banks, creating employment for over 13,000 people.

Thanks to the strength of its business scene, Leeds generates 5% 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 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 opened its second headquarters in Leeds, which reached completion in late 2020 and helped to employ hundreds of employees.

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.

Leeds city region is a hotspot for financial and professional services and has been coined the Financial Centre for Excellence by UK Trade & Investment.

This has helped to establish the financial sector of the city, as well as neighbouring cities such as Bradford, Halifax and York.

So, we know that those who buy property in Leeds benefit from things like high yields, positive growth and strong demand, but how do the qualities of the Leeds property market compare to property investment opportunities in other UK cities?

 Leeds vs London

The UK capital of London may seem like an unfair comparison for Leeds.

After all, the economic strength of London is unmatched in the UK, which generates around one-quarter of the UK’s total GDP.

Moreover, it also attracts more foreign investment than any other UK city, with Statista finding that London had more foreign direct investment projects in 2018 than every other UK city combined.

In fact, only Manchester came close in second place.

Despite these figures, though, the London property market and its economy have struggled in recent years.

The huge house prices in London have proved to be unsustainable, with frequent drops in property prices over the last five years.

From the latest data, you can see that Leeds is superior to the London market in most measurements.

Property prices are far more affordable than the capital, with far higher rental yields, to boot.

Moreover, the continued growth of the Leeds market is in direct odds with the London market.

Prices in the capital have increased by 10.38% since 2018, while Leeds prices have increased by 34.63% over the same period.

Leeds vs Manchester

With both cities located in the Northern Powerhouse, this comparison is likely at the forefront of investors’ thinking.

Over the past few years, Manchester has gained a reputation as the ultimate buy-to-let hotspot.

Not only does the city boast excellent rental yields and affordable property prices, but it also has some of the highest property growth statistics around.

The Leeds vs. Manchester comparison is less favourable.

Property prices are not only more expensive in Leeds, but they also lose in both rental yields and capital growth rates.

Those who invest in an apartment or buy a house in Leeds can also expect slower property growth than in the North West.

If you’re looking to learn more about Manchester property investment  and why it might be the best place to invest in the UK in 2023, be sure to read our detailed guide for more information.

Leeds vs Liverpool

Like Manchester, it’s hard to choose Leeds over this next North West city.

The city of Liverpool has exploded in popularity in recent years, with 2021 being a ground-breaking year for the city.

Property prices have soared in 2022 and 2023, with average prices now 10.87% higher than a year prior.

While Leeds boasts higher rental yields, it falls short in every other category, falling behind the capital growth seen in Liverpool over a 12-month and five-year period.

It should also be noted that while Liverpool’s average returns are less than Leeds, Liverpool property investment is well-known for offering some of the highest rental yields in the UK.

According to TotallyMoney, the L1 postcode offered the highest yields in the UK in 2020, with the potential to earn 10% returns.

Here at RWinvest, you can also get access to assured rental yields of 8% on some of our Liverpool properties.

Due to huge regional variations in property investment UK  areas, not every city offers the same level of investment returns.

This is even true when looking at individual cities, with regions in the city offering different levels of rental demand, house prices, and rental returns.

With this in mind, we’ve run the numbers and have worked out the top five best areas in Leeds for buy-to-let in 2023.

Below, you will find a look at the capital growth, rental returns, and house prices seen in the most popular Leeds buy-to-let areas.

So, if you’re looking at investment property for sale Leeds, or are looking for property to buy in Leeds, then this section is a must-read.

Leeds City Centre

Average House Price: £192,988 (Zoopla)
Average Rental Yield: 5.97%

One of the most popular areas in Leeds for investments, the city centre is amongst the key areas to consider if you’re looking for property to buy in Leeds.

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.

With affordable property prices of just £192,988 and returns of nearly 6%, Leeds city centre is offering a top prospect in 2023, with the area seeing 13% capital growth since 2019.

If you’re looking for flats to buy in Leeds city centre, prices are really affordable, t00.

Here, you can expect prices of just £129,764 for a one-bed flat to buy Leeds city centre, with two-bed flats to buy Leeds city centre valued at only £205,898.

factoring in this affordability with the upcoming South Bank scheme and a rising Leeds city centre population and you have a recipe for success in this buy to let hotspot.

If you want to learn more about flats to buy Leeds city centre, be sure to contact our property specialists today to find out more about the latest offers.

Armley

Average House Price: £136,501 (Zoopla)
Average Rental Yield: 7.10%

Located to the West of Leeds, Armley is a popular location for Leeds property investors due to low house prices.

Mostly consisting of terraced houses, ideal for Leeds property investors looking to rent to families, you can find a home in Armley from just £136,501.

Yields in this area are strong thanks to the average property prices of £136,501 – which is lower than the average house price in Leeds.

It’s unclear how much house prices will increase in these suburbs. However, with overall growth predictions for Leeds property prices being so high, it’s likely that house prices will see some significant growth in Armley over the coming years.

Headingley

Average House Price: £320,481 (Zoopla)
Average Rental Yield: 6.30%

Another area that is one of the best areas in Leeds is Headingley.

Headingley is a big student hotspot in Leeds due to Leeds Beckett University campus, making it one of the best buy to let areas in the city for student investment.

However, the area is also becoming a lot more popular with families and young professional tenants due to the excellent transport links and local amenities available.

Rental yields have been known to reach as high as 6.30% in Headingley, thanks to incredibly high rent costs aimed at students.

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.

If you’re looking for houses or flats in Leeds to buy for an investment, Headingley is a great option.

Crossgates and Garforth

Average House Price: £263,645 – £277,165 (Zoopla)
Average Rental Yield: 6.00%

Two separate but nearby areas in Leeds, Garforth and Crossgates, present excellent property investment potential and are some of the best areas in Leeds.

Due to strong transport links, these suburbs have a high population of both young professionals and families who are looking to either buy a house in Leeds or rent.

Yields are likely to reach around 6% 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.

Prices here are far more expensive than other areas in Leeds, though, which is worth keeping in mind if you have a smaller budget.

Burley and Hyde Park

Average House Price: £208,833 -£231,645 (Zoopla)
Average Rental Yield: 6.00%

Located between the city centre and Headingley lie two popular inner-city Leeds suburbs.

The Burley and Hyde Park areas of Leeds 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 a massive 8.06% 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 Burley and Hyde Park will increase over time in line with the overall Leeds property price growth of 11.7% by 2027.

For those who want to buy property in Leeds, these inner-city areas in Leeds present a fantastic investments solution.