Property investment is an ever-changing landscape as investors seek out new areas of the UK that offer exceptional returns on their investment. When people think about successful investors, they instantly think of London and the high rental costs that come with living there. However, despite the high rental costs, what it boils down to is yields.
As an investor in London, you might only be receiving 2%-4% in yields, which is not a significant amount and that is why investors are now turning their attention to the North and Leeds in particular.
Excellent Returns and Growth
A change is already happening as almost 68% of landlords in Leeds have come from the south of the UK and there is a reason for this- yields. They are leaving behind the poor returns on their investment in London and other areas and focusing on the potential of earning anything between 6% and 12% on their investment. Instantly, Leeds looks like a very attractive prospect.
Along with the yields, Leeds is a city that is growing, despite already being a recognised city. The north of the country is going through significant changes and Leeds is a part of that. However, what is also pushing investors north is the fact that Section 24 is having a significant impact already for landlords and in some instances it is forcing people into situations where they find themselves homeless. This is because landlords are having to increase their prices because they are now taxed based on income as opposed to profits, so when you consider the yields in London, Leeds offers more breathing space in terms of the yields that can be achieved there.
Despite this, Leeds is thriving and it is already home to three prestigious universities as well as being classed the main financial centre beyond London. Therefore, young professionals and students are moving to the area in considerable numbers in search of careers or studies, but all require accommodation. The demand is high and that is enabling investors to benefit from the property market in Leeds.
There are two other significant reasons why Leeds is an area that investors should consider. It has already been identified that Leeds is an up and coming city but this is all down to the many developments that are taking place there. The Northern Powerhouse Rail or HS3 as it was previously known will connect Leeds to other areas of the UK, allowing people to benefit from the lower rents while chasing careers in the likes of Birmingham and even London without having to pay the extortionate rental prices.
Of course, the Northern Powerhouse Rail ties in with the Northern Powerhouse project which is putting the North of England on the map in a big way. Many large, global businesses are now moving and locating themselves in this new and exciting area due to the lower costs with a total of £5 billion of foreign investment being committed to fund 14 projects. As they position themselves in the North, it will create jobs and opportunities, all of which will bring people to the area who require housing.
For investors, Leeds is a viable and attractive option beyond the boundaries of London. Yields are high, prices are lower and that provides investors with opportunity. However, there is no doubt that over the next few years, the demand for property will grow and that will enable investors to experience significant returns on their investment.