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Leeds Property Investment

A Powerful Northern City

Located in West Yorkshire, Leeds is one of the largest and most centrally located cities in the UK. This city is known for everything from its expanding business scene to famous shopping options and nightlife attractions. Tourism is popular in Leeds, with the city having seen a 6.3% increase in tourism visits between 2016 to 2017. This is no doubt fuelled by the city’s many events and attractions such as Leeds Music Festival and the popular Leeds City Museum.

Leeds isn’t just a good spot for tourism, though. With thriving economic prospects, combined with a high demand for living space from potential tenants, this northern city is one of the best property investment UK areas. 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? We’ll cover all of this and more in our guide to investing in Leeds property.

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Property Investment
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Why Invest in Leeds?



Property Investment Leeds
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Leeds' Young Population



Property Investment Liverpool
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Outlook for the Future



Property Investment Leeds
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Top 5 Leeds Property Hotspots



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Why Invest in Leeds?

The question on a lot of property investors lips is – ‘why invest in Leeds?’. Leeds property investment has become a more common prospect since the city has made 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 increased by 4.2 % since 2017. Because of this figure, Zoopla recently ranked Leeds number nine in a list of the top ten UK housing markets, further boosting the appeal of Leeds investment.

So why is Leeds a good place for UK property investments? Before buying property in the UK, take a look at some of the reasons why you should take advantage of the opportunities for buy to let Leeds offers.

Leeds Has High Demand From Young Professional Tenants

Population statistics last recorded in 2019 reveal that the Leeds population stands at around 792,525. 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 an increase of 151%. Not only this, but the level of employment in Leeds is also increasing, with a 34% rise in employment recorded in 2018.

With a higher population comes a demand for more residential property to be built. This is where property investment comes in, as in order for buy-to-let investors to make returns through guaranteed rents 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. This demand for property is coming from a wide range of people such as young professionals working in the city, young families that relocate to the area, and students attending the many universities Leeds has to offer. Throughout 2020, rental demand has surged across the UK, with a 2.2% annual rise in demand recorded by Zoopla in June for all regions excluding London. In Yorkshire and the Humber, in particular, the largest annual growth of 3% was recorded, showing that Leeds investment remains a strong prospect despite Covid-19 uncertainty.

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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 and the rise of rental demand in the Leeds property market. 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 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 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 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. The new Channel 4 offices officially completed in November 2020, and expect to see hundreds of employees move in within the coming months.

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 second-largest economy and second-largest 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.

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Leeds Has a Reputation as a Student Investment 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. This is because student properties are known for generating some of the highest rental yields and most reliable demand of any property type.

Home to one of the largest populations of students in the UK and from overseas, and considered one of the best student cities in the country, Leeds property investment in student accommodation is certainly a worthwhile venture. Those who are thinking about Leeds investment for their next buy to let venture in the UK should definitely explore student investment opportunities available in the city.

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 university city not only boosts the success of student property investment due to the high demand for student accommodation, 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. With 2020 seeing a record number of university applicants across UK cities, the future definitely looks bright for investments in student cities like Leeds.

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Leeds Has 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 5.12 % according to recent Zoopla statistics, 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 £266,483, with Zoopla data revealing that the average value of a two-bedroom flat in Leeds has grown by 7% between 2019 and 2020.

To make the appeal of buy to let in Leeds a little clearer, here are some current average rental yields available in the city based on Zoopla average house price and rental price statistics for different types of property to buy in Leeds.

Ongoing regeneration Leeds Ongoing regeneration Leeds

Leeds Has a Positive Outlook for the Future

Ongoing Regeneration

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 even 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 feet of commercial developments.

Increased Growth for the Leeds Property Market

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 % by 2023. Better yet, in recently updated predictions, Savills expects property prices in the Leeds property market to increase significantly, with an expected growth of 24.1% for the Yorkshire and the Humber region.  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.

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How Does the Leeds Property Market Compare to Other UK Areas?

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?

Let’s start with London. As mentioned above, Leeds seems to have the upper hand when it comes to economic growth compared to London, with reports revealing that the Leeds economy grew faster than London since the end of June 2014. This isn’t the only way that Leeds has outshone London, as when looking at Leeds buy to let returns, the Yorkshire city boasts a higher rental yield of around 5.12%, while London’s average yields are closer to 3%.

While Leeds does rank higher than London on the rental yield front, there are, however, some UK cities which outperform Leeds. Liverpool, for example, boasts average yields of 5.48%, and Manchester has an average 5.16% rental yield. In certain postcodes in Liverpool such as L1, rental yields can reach heights of 10%, which is miles ahead of the yields that come from Leeds property. Those who invest in an apartment or buy a house in Leeds can also expect slower property growth than in the North West. While Yorkshire is expected to see a growth of 24.1% by 2024 according to Savills, the North West region expects growth of 27.3%.

 

Should I Invest in Liverpool or Manchester Instead of Leeds?

While the statistics point towards North West cities Liverpool and Manchester being the stronger option, many people still consider finding property to buy in Leeds a lucrative investment. If you want to reap the benefits of both Leeds and these North West cities, a good idea could be to add a property from each city to your investment portfolio.

However, if you don’t have a large budget, and would rather purchase just one property with the highest possible returns, you might not get your money’s worth if you buy Leeds property in the same way that you would with a Liverpool investment. Liverpool properties tend to be a lot more affordable compared to Leeds property prices, such as our buy to let opportunity Poets Place which is priced from just £78,950 with an impressive 8% rental yield. All in all, the Leeds property market does present some good opportunities, but for stronger growth and the highest yields, it’s definitely worth exploring property investment in Liverpool and Manchester.

The Top 5 Leeds Buy to Let Hotspots

The prospects for property Leeds offers present a good investment option overall, but certain Leeds buy to let postcodes come with varying levels of potential. Before you buy Leeds property, find out about the best areas of Leeds to invest in with these top five Leeds buy to let hotspots.

Armley, Hunslet and Beeston

Population: 78,300

Average House Price: £172,987

 

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 strong thanks to the average property prices of £172,987 – which is 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 growth predictions for Leeds property prices being so high, it’s likely that house prices will see some significant growth in the Armley, Hunslet and Beeston areas.

Leeds City Centre

Population: 32,300 (Centre for Cities estimate)

Average House Price: £214,294

 

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.

The rental yields on offer are another reason why the city centre is one the best buy to let areas in Leeds. Rental yields within the city centre have an average of around 5%, 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.

Headingley

Population: 32,150

Average House Price: £202,216

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 7.4 % 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. If you’re looking for houses or flats in Leeds to buy for an investment, Headingley is a great option.

Crossgates and Garforth

Population: 86,200

Average House Price: £213,457

Two separate but nearby areas in Leeds, 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 who are looking to either buy a house in Leeds or rent.

Yields are likely to reach around 5% 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

Population: 45,600

Average House Price: £139,169

Located between the city centre and Headingley lie three popular inner-city Leeds suburbs. The Woodhouse, 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 around 5 or 6% 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 24.1 % over the next five years. For those who want to buy property in Leeds, these inner-city areas in Leeds present a fantastic investments solution.

Armley, Hunslet and Beeston

Armley, Hunslet and Beeston

Population: 78,300

Average House Price: £172,987

 

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 strong thanks to the average property prices of £172,987 – which is 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 growth predictions for Leeds property prices being so high, it’s likely that house prices will see some significant growth in the Armley, Hunslet and Beeston areas.

Leeds City Centre

Leeds City Centre

Population: 32,300 (Centre for Cities estimate)

Average House Price: £214,294

 

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.

The rental yields on offer are another reason why the city centre is one the best buy to let areas in Leeds. Rental yields within the city centre have an average of around 5%, 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.

Headingley

Headingley

Population: 32,150

Average House Price: £202,216

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 7.4 % 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. If you’re looking for houses or flats in Leeds to buy for an investment, Headingley is a great option.

Crossgates and Garforth

Crossgates and Garforth

Population: 86,200

Average House Price: £213,457

Two separate but nearby areas in Leeds, 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 who are looking to either buy a house in Leeds or rent.

Yields are likely to reach around 5% 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

Woodhouse, Burley and Hyde Park

Population: 45,600

Average House Price: £139,169

Located between the city centre and Headingley lie three popular inner-city Leeds suburbs. The Woodhouse, 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 around 5 or 6% 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 24.1 % over the next five years. For those who want to buy property in Leeds, these inner-city areas in Leeds present a fantastic investments solution.

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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 residential investments for sale in the UK, featuring some fantastic Liverpool and Manchester investment opportunities with net rental yields of up to 8 %.

If you want to take your first step to investing in UK property with RWinvest, contact us today, and we can help you find your perfect residential or student investment from our range of developments.

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 Zoopla and Totally Money. Statistics on student numbers have been taken from the University of Leeds and Leeds Art University website.

 

DISCLAIMER: This guide to buy to let in Leeds was last updated in November 2020. This may mean that certain statistics have changed by the time you read this guide, in accordance with Leeds property market fluctuations.

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