Buy-to-let has become one of the most talked about topics of 2015. Over the last few years, more and more people have realised the potential of investing into the British property market, as demand for rental accommodation has far surpassed the actual supply of available housing stock. News headlines tell the same story: as the government struggles to meet housing demand by building an insufficient amount of homes each year, property prices have skyrocketed leading to homeownership increasingly becoming a thing of the past.
Ever since then, the nation has seen the rise of a phenomenon known as “Generation Rent” – where a sizeable proportion of the country’s population is not able to get their foot onto the property ladder and therefore continues to rent their accommodation privately. In effect this has caused the UK buy-to-let market to thrive beyond all measure. The market has additionally benefited from investors looking for higher returns than they would receive on their savings in the current low interest environment.
As of late there is a new competitor coming forward in the buoyant UK buy-to-let market: the booming city of Leeds. Located in the heart of Yorkshire and the Humber, Leeds is one of the driving forces of the country’s Northern Powerhouse initiative, campaigned for by Chancellor George Osborne to re-balance the British economy. According to research by global property consultancy Knight Frank, the up-and-coming Leeds property market is flourishing like never before, with gross yields standing at 8.2%, outperforming the British capital by as much as 4.1%.
Research by banking giant Barclays furthermore backs up Leeds’ ever-growing success story: its data has shown that the country’s buy-to-let hotspots are changing in 2015. Leeds perhaps was the biggest surprise, jumping an astounding 40 places from 47th place to 7th - overtaking other major cities such as Southampton. The city is now within the top ten destinations for desirable buy-to-let properties in the country, together with the likes of London, Birmingham, Bristol, Nottingham and Manchester.
Rental demand in Leeds continues to be extremely high, enabling investors to enjoy the benefits of growing property prices, comparatively low void periods and higher than UK average returns. Demand here is further fuelled by the fact that the city has experienced very little building of new developments over the last decade. Nevertheless, with a burgeoning economy and ever-growing population (currently at approximately 784,000), Leeds has managed to attract the attention of the country back to itself.
The future definitely looks bright for Leeds, which is starting to prove itself in the world of buy-to-let investments. As an investor, it is now that market conditions are most favourable – particularly as current prices and market saturation are relatively low and allow high investment returns, but are expected to increase over the next few years as more property investors begin to capitalise on Leeds’ buy-to-let environment.