Savvy in­vestors move in as they sense prices are at rock bot­tom

North Leeds may be the most de­sir­able place to live in the city but the hotspots are in the south. Sharon Dale re­ports.

Yorkshire Post - Property - - PROPERTY -

IF you as­pire to live in Leeds’s best lo­ca­tions then you look north to­wards old favourites like Al­wood­ley, Adel and Bramhope, home to the high­est per­cent­age of mil­lion­aires.

Yet the smart money is look­ing in en­tirely the op­po­site di­rec­tion, ac­cord­ing to es­tate agent Mark Man­ning of Man­ning Stain­ton, who re­veals that in­vestors are busy snap­ping up homes in south Leeds sub­urbs like Bee­ston, Hun­slet and Hol­beck.

“There are a large num­ber of in­vestors buy­ing ter­raced prop­erty be­tween £60,000 and £85,000. They are also look­ing to turn larger prop­er­ties into bed­sits,” says Mark. “They are look­ing at rental yields of eight per cent for a ter­raced prop­erty and up to 20 per cent for a HMO (house in mul­ti­ple oc­cu­pa­tion), which are ex­cel­lent re­turns com­pared to sav­ings ac­counts or stocks and shares.”

Most of the in­vestors are savvy cash buy­ers who sense that prices have reached rock bot­tom and could rise in the near fu­ture.

“When the prop­erty mar­ket last hit the skids, the first ar­eas that came out of the slump were places like Bee­ston and that seems to be the case again. In­vestors are the most clued up so the fact they are buy­ing is a very good in­di­ca­tion that there is light at the end of the tun­nel,” says Mark.

First-time buy­ers will find the price is right in south Leeds, though some con­sider the area too “edgy”. In­stead, many are hunt­ing in up and com­ing spots like Head­in­g­ley and Mean­wood, where stu­dents are va­cat­ing prop­er­ties to be closer to uni­ver­si­ties.

Trendy Chapel Aller­ton’s pop­u­lar­ity is wan­ing slightly as young buy­ers head to nearby Round­hay.

“Round­hay has al­ways been pop­u­lar but it’s even more so now, es­pe­cially with young buy­ers who are think­ing ahead to chil­dren and are look­ing for good pri­mary schools,” says Mark who adds that first-time buy­ers aren’t as keen on ren­o­va­tion projects. The pres­sure to get a de­posit to­gether leaves no spare money for ren­o­vat­ing a prop­erty. They look for some­thing well­p­re­sented at the right price.

Prices in Leeds have fallen be­tween five and 25 per cent since 2007, de­pend­ing on area but although the mar­ket is sub­dued Man­ning Stain­ton re­port a 25 per cent rise in sales in Novem­ber com­pared to the pre­vi­ous year.

A per­cent­age of buy­ers were re­lo­ca­tors at­tracted by jobs and ameni­ties, which will soon in­clude a new £60m arena.

“Peo­ple want to live in Leeds. It’s changed a lot over the last 15 years. It’s a big com­mer­cial cen­tre and it’s very cos­mopoli­tan,” says Mark.

Nowhere has changed more than the cen­tre of Leeds, where city liv­ing has proved a big suc­cess.

Jonathan Mor­gan, man­ag­ing di­rec­tor of sales and let­tings com­pany Mor­gans City Liv­ing, says that while sales here have de­clined, rentals are boom­ing and there is now a sup­ply and de­mand prob­lem.

“We fully ex­pect this trend to con­tinue through­out 2012 and prob­a­bly be­yond. Mort­gages are harder to come by at an eq­ui­table rate and, as a con­se­quence of this, many would-be first-time buy­ers are choos­ing to rent in­stead.”

Those who bought off plan in the re­cent boom have had mixed for­tunes.

“Those who in­vested sen­si­bly with gen­er­ous de­posits and a long-term view have been able to sit back and en­joy grow­ing rents and great buy­ing op­por­tu­ni­ties, whilst those who re­lied on in­stant eq­uity in a grow­ing mar­ket and didn’t put in a sig­nif­i­cant de­posit, have been fight­ing a los­ing bat­tle. As the cost of bor­row­ing for highly geared mort­gages has risen faster than rents have, many of these buy­ers have ended up fac­ing re­pos­ses­sion. In keep­ing with the adage that one man’s loss is an­other man’s gain, this has al­lowed es­tab­lished land­lords to ex­pand their port­fo­lios at a sig­nif­i­cant dis­count,” says Jonathan.

“Our most pro­lific client ac­quired six dis­tressed city cen­tre prop­er­ties in 2011, all from dis­tant as­set man­agers and in the process, cre­ated gen­uine eq­uity of £250,000. His best pur­chase in our view was a prop­erty he bought at auc­tion in Lon­don for £100,000 which would sell on the open mar­ket for around £140,000.”

The city cen­tre is starved of new rentals. The 20,000 new apart­ments set to be con­structed by about 2020 have been de­railed by the re­ces­sion and new builds are likely to be lim­ited to about 1,000. Rents in the city cen­tre, which range from £550 for a one-bed­room flat and £750 for a two-bed­room, are now in­creas­ing slightly thanks to the de­mand.

VIEW FROM ABOVE: The pent­house at Simp­son’s Fold, Leeds, for sale through Mor­gans, has spec­tac­u­lar views.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.