The Northern Powerhouse Plan: Leeds to rival London?

Whether it’s down to the ongoing BREXIT saga or the crippling stamp duty levy at the premium end of house buying, some parts of the prime Central London property market are on the verge of capitulation. House price growth in some of the most affluent areas is stalling or even in reverse, and the office/commercial markets are cautious over the possible mass exit of banks and financial institutions.

At the same time, the Northern Powerhouse Plan is gaining momentum, with Leeds making a bold claim as an alternative to London. The Government’s overarching idea is to get some of the North’s leading cities and towns to join together to create a ‘collective force’ to rival London. There’s even an appointed Northern Powerhouse Minister – MP Andrew Percy – designated to push the plan forward.

While figures published by the BBC in 2015 show that Leeds’ economic output in terms of gross value added (GVA) lags behind Greater Manchester, (26,741 GVA per head versus 25,950 GVA), the margin is slim and investment in Leeds – both inward and from overseas – is strong. Money from China is behind many of the city’s ambitious regeneration plans, including the development of a new high-speed train route connecting Leeds to Liverpool, Manchester, Newcastle and other major cities, dubbed HS3. Leeds is also a stop on the HS2 line, making the inevitable and still necessary travel to London all the more bearable.

Leeds, over Manchester, is looking to surge ahead in terms of residential property options. House prices in Leeds have been rising for the last 12 months and there are already signs that securing a city centre base – to rent or buy – is beginning to mirror London, with demand outstripping supply. This can be partly attributed to Leeds’ city centre population, which more than doubled between 2001 and 2011, from 12,265 to 26,020. And like London, the wage income to property value ratio is slipping out of kilter – the average price of a property in the city is now more than £178,000, while the average wage is just over £25,000.

The good news is house building in Leeds is on the rise, with 1,000s of new homes in creation at sites including the former Tetley Brewery, Leeds Dock, Tower Works and in the East Leeds Extension area. It is thought that many of these new homes and some of the existing property stock will find their way into the private rental market.

 

A recent article by one of the leading property industry websites – estateagencytoday.co.uk – describes Leeds as being ‘in the throes of a rental boom’ and landlords are attracted by exceptional yields. New research by comparison site TotallyMoney actually found that yields of almost 11% are being achieved in some parts of Leeds. The returns are appealing to the corporate landlord sector too, with Grainger recently confirmed as buyers of a build-to-rent development on the former Yorkshire Post gateway site.

 

To go with new homes in Leeds are new jobs, notably in the city’s South Bank area. Companies including Vastint, Burberry and Citu have already committed hundreds of millions of pounds of investment to the South Bank, where tens of thousands of new jobs will be created.

 

As Leeds’ push to usurp London gathers pace, relocation companies should expect to place employees in the city on a more regular basis. If you need to find rented accommodation and resettle clients in Leeds city centre or on the fringes, working with a relocation and orientation agent will be crucial, especially as competition for each property increase. Adleo Relocation has agents active in Leeds, so get in touch today.

 

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