From empty flats fear to soar­ing de­mand for city’s star per­former

Fears of an over­sup­ply of flats dogged Leeds city cen­tre in the boom but now there aren’t enough to ful­fil de­mand. Sharon Dale re­ports.

Yorkshire Post - Property - - FRONT PAGE -

ER­RO­NEOUSLY dubbed the “empty flats cap­i­tal of the North”, Leeds city cen­tre ended the prop­erty boom on a low, like a D-list celebrity pil­lo­ried for be­ing all fur coat and no knick­ers.

One Lon­don-based ar­chi­tect, Maxwell Hutchin­son, even de­clared that the new apart­ments would be the “slums of the fu­ture”. He was wrong.

The city cen­tre is a now a star per­former and one of the most sought-af­ter lo­ca­tions in Leeds, es­pe­cially pop­u­lar with young pro­fes­sion­als keen to live close to work and play.

The let­tings mar­ket has gone strato­spheric and, ac­cord­ing to Jones Lang LaSalle’s lat­est re­port, sales are 50 per cent up on last year and stock is low.

Guy Ack­ern­ley, head of res­i­den­tial at Jones Lang LaSalle’s Leeds of­fice, says there is now a chronic short­age of apart­ments to let and buy.

Jonathan Mor­gan, of Mor­gans, has just re­ported record rental oc­cu­pancy lev­els of 99 per cent with three or four would-be ten­ants fight­ing over ev­ery va­cant prop­erty.

Over at Coun­try­wide, which owns Bridg­fords and Flatsin­leeds, Jor­dan Yo­rath has the same prob­lem: “We are ex­pe­ri­enc­ing de­mand that out­weighs sup­ply. If you are search­ing for an apart­ment it is a dif­fi­cult time.

“The is­sue is com­pounded by an im­prov­ing sales mar­ket, as first-time buy­ers have lit­tle choice other than to pur­chase prop­er­ties that were pre­vi­ously let.”

All the agents be­lieve there is an ur­gent need for new apart­ment schemes, but even if de­vel­op­ers re­spond, sup­ply is un­likely to im­prove for the next few years.

There are 11,000 apart­ments with 14,000 res­i­dents in the city cen­tre and Leeds City Coun­cil say there is plan­ning per­mis­sion for 6,097 more flats in core and fringe ar­eas.

Yet only one or two schemes are likely to get off the ground any­time soon.

Mar­shall CDP is hop­ing to start on 77 apart­ments at the old This­tle Ho­tel site at Calls Wharf in spring next year. They should be com­plete in 2016. There are sug­ges­tions that work may be­gin on another 230 flats in the city within the next two years, but there are no signs yet that Tay­lor Wim­pey will re­vive its moth­balled Green Bank site on Globe Road.

The com­pany has per­mis­sion for 887 flats and has sub­mit­ted a re­vised plan­ning ap­pli­ca­tion.

“De­vel­op­ing in the city takes time even if you have plan­ning per­mis­sion. It can take up to a year for ten­der­ing con­tracts and then another two to three years un­til the build is fin­ished,” says Mr Ack­ern­ley.

One hope is that de­vel­op­ers will seize the chance to build-torent, sell­ing on to pen­sion funds rather than to in­di­vid­ual buy to let in­vestors, as hap­pened in the last boom.

“Pen­sion funds and big in­sti­tu­tions are look­ing at buy­ing in Leeds but there is noth­ing for sale,” says Mr Ack­ern­ley.

“It’s a shame be­cause that model works well. The funds de­mand high qual­ity schemes be­cause they are in­vest­ing for the long-term.”

Rush­bond’s Crispin Lofts, the city cen­tre’s big­gest ever built-torent scheme, is tes­ta­ment to how well it can work. Its 82 apart­ments are a far cry from the “rab­bit hutches in the sky” seen in some older de­vel­op­ments and they were snapped up by ten­ants.

Jor­dan Yo­rath, who be­lieves rents may be pushed higher due to lack of sup­ply, sug­gests that turn­ing old of­fice space into flats could also form part of the so­lu­tion, es­pe­cially as the Gov­ern­ment has re­laxed rules on change of use from com­mer­cial to res­i­den­tial.

He says that older build­ings strug­gle to com­pete with grade A of­fices and turn­ing them into homes would guar­an­tee year­round oc­cu­pancy and in­come for the free­holder.

For those who in­vest in city liv­ing, rental yields stand at healthy 6.5 per cent, with an av­er­age one-bed flat cost­ing £110,000 and rent­ing at £575 per month and an av­er­age two-bed from £160,000 and rent­ing at £750.

Jonathan Mor­gan adds that the bulk of city cen­tre apart­ments are al­ways likely to be oc­cu­pied by renters.

“Rather than see­ing this as an un­healthy im­bal­ance, we see a vi­brant and well-sup­plied rentals mar­ket as a vi­tal com­po­nent of an eco­nom­i­cally and com­mer­cially suc­cess­ful city.

“As the pro­vi­sion of city cen­tre ameni­ties grows, such as a varied and eclec­tic evening econ­omy and the pro­vi­sion of great pub­lic spa­ces, it is clear that there will be even more rea­sons for the next gen­er­a­tion to make their home here.

“We look for­ward with a great deal of con­fi­dence in what is now one of the most vi­brant places to live north of Lon­don.” This apart­ment has an open plan liv­ing area and bal­cony with views of the canal. There is one bed­room, a bath­room and a large util­ity cup­board plus stor­age space. Con­tact: Jones Lang LaSalle, tel: 0113 205 3333, www.jones­lan­glasalle.co.uk

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