Looking at places to begin a buy-to-let portfolio this year? If the answer is yes, then we strongly suggest you consider Leeds as one of your stand-out options. With one of the best ROIs in the country, landlords can expect to enjoy an average of 8.7% yield with properties in the area.
Leeds is an exciting and prosperous city right now, with figures for rentals, the economy and its population all expected to climb upwards over the coming years. A perfect combination to create a vibrant and dynamic lettings market. Read on to discover why Leeds is a good place for buy-to-let.
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Reasons to Buy Property in Leeds
Leeds is the UK’s fastest-growing city, with a £64.6 billion economy, a combined population of 3 million and a workforce of 1.37 million. It’s regarded as the dominant economic force in the North of England. The number of mid-size and large companies and organisations based in Leeds is significantly above that of the national average. These include: Asda Group, First Direct, Centrica, Ventura, BT, Direct Line Group and Yorkshire Bank.
The city is home to three internationally-recognised universities, one of the largest further education colleges in the UK and Europe’s largest teaching hospital trust. The availability of high-quality jobs and education facilities means there’s always a high influx of professionals and students looking for rentals around the city. This just goes to show why now is the perfect time to invest in property in Leeds.
Is Leeds a Good Place for Buy-to-Let?
The simple answer is yes! It’s ideal for buy-to-let investors as it has one of the highest potential yields in the whole of the UK; an average of 8.7% compared to London’s 3.05%.
Other reasons include:
- Below national average house prices.
- Shortage of rentals.
- Rents set to rise.
- Population growth forecasted.
Below National Average House Prices
Leeds’ average housing prices are 20% less than that of the national figure – a huge £50,000 difference, in fact.
High Rental Yield
Leeds offers one of the best ROIs in the country, with an average of 8.7% across all rental sectors.
Shortage of Rentals Properties
Housing stock is in short supply throughout the UK. Many landlords have moved into the lucrative Airbnb model, so demand for good quality rentals is high.
Rents Set to Rise
Rents have been rising across the UK with the North East on a steady upward trajectory. There are no predictions for a slowdown, either.
Population Growth Forecasted
It’s predicted that, by 2033, Leeds will have a population between 930,000 and 1,000,000. This is up from 526,023 in 2022. Greater demand for housing will ensure a continually buoyant rental market.
Is it Worth Investing in Leeds?
Whilst the talk of economic slowdowns, cost of living crises and, of course, our national post-pandemic situation continues, it doesn’t seem to have had an effect on the Leeds housing market. House prices increased by 1.98% from June to July this year – better than London’s figure of just over 1%.
Overall, from last year up to July 2022, according to HM Land Registry, average house prices in Leeds rose 11.1% from £213,051 to £236,601. With strong demands for rentals of all types, it’s the ideal time to invest in property in Leeds.
Buy-to-Let in Leeds
So, what are the best areas to purchase a buy-to-let property in Leeds? It’s a large, diverse city with the population to match. Depending on what sector you wish to target, Headingley, Leeds City Centre and Chapel Allerton are all great places to invest in.
With rental yields as high as 11.74%, this is a prime area to look into. It’s the student area of Leeds, with Leeds Beckett University campus based here. As Leeds is a highly-respected university city, and many graduates continue to live and work here, you’ll never be short of tenants.
If you’re thinking of entering the HMO market, then Headingley will certainly yield good returns. It’s also an area increasingly popular with young families and professionals with great transport links to the City Centre, with a bus every 7 minutes, and a range of shops and schools.
This suburb, located between Headingley and Roundhay, is seen as an up-and-coming area for young families with a good selection of schools and access to outdoor spaces. It has a good community feel and plenty of housing stock for 3 to 4 bed properties, as we discovered from our conversation with one of the local estate agents in the area. Chapel Allerton certainly provides a good investment for long term rentals if looking to purchase property in Leeds.
Leeds City Centre
An area of ongoing regeneration and redevelopment, Leeds City Centre boasts fantastic investment opportunities to buy high-end apartments. They’re always popular with the young professional, affluent set, who prefer to live centrally for work and to enjoy the vibrant nightlife that Leeds has to offer.
When looking at buy to let properties in the Leeds area, have a look at these expert tips:
1. Use an established, independent estate agent with a good letting reputation
Local knowledge is key here, so be guided by what the professionals are advising.
2. Establish your targeted tenant
Do you want a stable long term tenant who will look after your property and not be in a rush to move? Or would you prefer a houseful of students who will be happy to pay the going rent without too many demands? Deciding on your market is crucial in order to help you choose your location. Again, let the local estate agents guide you in this regard.
3. Shop around
You may be able to pick up a bargain HMO which needs a bit of work; if this can be completed quickly, then you’ll be getting a great addition to your property portfolio. Consider buying off-plan, where you might get an incentive deal.
4. Finding your tenants
Register with some of the largest companies, HR departments and the university student services section. They will always have employees needing to relocate, as well as students in need of accommodation.
5. Keep up to date
The market changes all the time and, in big cities, new areas rapidly become the place to buy. Keep your ear close to the ground and you might just pick up a bargain!
*Insider knowledge: Temple Newsam is the area for fastest growing house prices in 2022*
If you’re serious about getting into the buy-to-let market, then now is the time. With the recent changes to Stamp Duty, the housing market looks set to keep growing, so the sooner you can purchase, the better.
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Millie is a perfectionist with a passion for property and writing articles. You’ll find her researching the latest housing trends and the newest up and coming areas worth investing in. Read more about Millie here.