Strong demand for urban living is a key factor in the rising demand for Yorkshire property, according to JLL.
House prices in Yorkshire are set to increase by 13.6% in the next five years according to JLL, with growth in the region outpacing the rest of the UK in 2017. In the Leeds, JLL is forecasting house prices to increase by 21.6% from 2017-2021.
JLL’s new Northern England report shows the housing market in Leeds and the other major Northern Powerhouse cities will be buoyed by high demand and low supply - resulting in growth in both rents and capital values, despite UK-wide uncertainty.
The report highlights that residential property performance will be stronger in city centres than in traditional housing in out of town locations derived from a complete turnaround in the appetite, desire and view towards city centre living.
Driven by young professionals, the city’s 50,000 students and new residential development, Leeds is set to see the largest increase in rents in comparison to Manchester and Liverpool over the next five years – with growth reaching 22.2%.
JLL says around 12 consented new developments, totalling over 5,000 units, are expected to start on site in Leeds city centre in the next 12-24 months. This much needed supply will undoubtedly stoke the market creating churn and raising prices for the better schemes.
Charles Calvert, head of JLL’s Residential team in Leeds, said: “Leeds has a significant amount of pent up demand for city centre residential property and there has also been strong demand for development land – a sure sign of confidence in the city.”
Typically a one bedroom flat commands an average rent of £650 per calendar month (pcm), while two bedroom flats rent for an average of circa £895 pcm. Prime one bed flats rent for an average of £850 pcm while prime two bed flats rent for £1,200 pcm. Car parks achieve rents of circa £100pcm to £150pcm.
In the sales market, typical prices of one and two bedroom flats in the city centre were circa £120,000 and £180,000 respectively at the end of 2016, having increased by 4.2% on average during 2016. JLL says that prices in Leeds look low when compared with other major UK regional cities such as Manchester and Birmingham as well as smaller local markets such as York and Harrogate.
He added: “We anticipate that as the first significant, well located new developments in Leeds are brought forward, the stimulus to the market will result in an increase in turnover and a price improvement to bring those schemes more in line with comparable regional city centres.”
According to JLL’s report, Leeds and Manchester will need an extra 2,200 and 3,300 new homes every year respectively. This is underpinned by forecast GDP increases in the Northern Powerhouse’s major cities driven by growth in sectors including professional services, transport and construction.
Calvert concluded: “Leeds is in a unique position - it has a strong economy, an unmatched retail and leisure offering, pent up demand for new housing to buy and rent and a shortfall of 7,500 homes per annum across the Metropolitan district.
"There is strong demand for development land with the introduction of Private Rented Community developments also set to enhance the city’s rental offering.
"What we continue to shout for is more new schemes to come forward - it would be a shame to look back at the end of 2017 and see such a great opportunity missed.”
Our BQ Bulletin emails will land in your inbox at 7.30am, Monday to Friday, with a mix of the latest local business news, national news, and features to inspire you. Sign up here!
Click here to read our privacy statement