In the first of a series looking at property in UK cities, Edel Morgan visits Leeds - where a large population of professionals is leading to a boom in apartment building
Those under the impression it's grim up north may be surprised to learn that Leeds was voted "Favourite UK City" by readers of the Condé Nast Traveler magazine and is described as "the Knightsbridge of the north" in the Lonely Planet guide.
Leeds also ranks as one of the best three UK cities for shopping, according to a survey carried out by Experian. It has a compact city centre of only a mile wide full of Victorian shopping arcades and crammed with opulent boutiques as well as the usual high street and designer names.
The city's increasing appeal as a place for young professionals to live, work and relax has not been lost on Irish investors. The fastest-growing city in the UK with the largest legal centre outside of London and with a healthy financial sector, Leeds is currently in the midst of a city centre building boom. Irish investors target prime riverside properties being sold off the plans, according to Jonathan Morgan of Morgan estate agents, and they tend to buy apartments in bulk.
"A guy will come over and buy a number of units and agree a discount and then will sell them off back home. Many bulk deals are bought by groups."
According to a report by Allsop & Co estate agents, over 1,800 new dwellings have been built in recent years in the city centre. A further 2,525 are under construction with another 1,670 in the planning pipeline. A planned further 4,600 will bring the total number of units to 10,600. While some commentators warn this could lead to saturation in the market, others are less concerned.
"With an expanding metropolitan population which stands at 715,000 and an enormous professional base, huge inward relocation, a strong management base and large scale employment in the health sector, the civil service and management consultancy, we expect demand to continue.There will be peaks and troughs but but we expect it to be completely manageable," says Jonathan Morgan.
According to Peter Bastable of Dublin-based Simply Mortgages, entry cost can be higher than other northern cities but "you are paying for a better product. However, investors should be in it for the long haul, not expecting to make a bucketload in a couple of years."
Leeds city centre has come a long way since the launch of the first inner city apartment scheme, 32 The Calls, a decade ago when the Lady Mayor was reputedly heard to say: "Who on earth would want to live around here?"
The city's radical change of image from declining industrial town to young progressive city is partly attributable to major investment in residential building and investment in cultural and leisure facilities. The growth in the financial and business services sector has created a demand for executive-style accommodation.
Most of the demand has come from investors, typically buying off the plans, and mainly with a view to long-term capital appreciation. A popular price range is two-bedroom apartments between £125,000 (€183,346) and £150,000 (€220,218) but it is becoming increasingly difficult to find two-beds in this range. Rents typically range from £800-£1,000 per month (€1,177-€1,472) in prime city centre locations. One-beds cost from £110,000-£130,000 (€161,935-€191,378) and two-bedroom units from £140,000 to £190,000 (€206,090-€279,694).
These investors tend to take "a relaxed view of rental return", because they are trading on at a capital profit. Early apartment developments were mainly riverside warehouse conversions. The largest developments are on the waterfront, The Quays, Merchants Quay, Victoria Quay, and Whitehall Quay, Clarence Dock, Brewery Wharf and Granary Wharf.
There has been an issue surrounding car-parking provision, or the lack of it, but this is expected to be addressed by developers of future schemes, according to an Allsop report.
Another popular location is the business district around Park Row , the Civic Quarter and Millennium Square and Great George Street, and the fast-emerging Whitehall Road corridor which is set to see plenty of mixed use development in the next few years.
Irish investors have been sticking to the city centre, although property on the fringes is cheaper. You can get a one-bedroom apartment there for £80,000 (€117,789). While the city centre is small, the greater Leeds area extends 15 miles from east to west and 13 from north to south. This wide boundary contains some 562 sq kms of green belt, with some of most beautiful scenery in Yorkshire.
The ring surrounding the outer commercial core is known as the urban doughnut and in parts has poorer quality housing stock with fewer amenities.
However, according to Jonathan Morgan, those brave enough to invest in the fringes may be rewarded with the best capital appreciation, particularly to the east of the city and in the northern quarter.
Irish investors have avoided the outer suburbs but there has been substantial growth in the student areas of Headingly, Kirkstall and Burley and in the affordable areas of Armley, Wortley, Beeston and Hunslet which are close to the city centre with a good supply of terraced housing.
Lovely Leeds
Population: 715,404, making it the third biggest city in the UK after London and Birmingham
Main industries: engineering, printing and chemicals. Fastest-growing industry is financial services
Universities: University of Leeds and Leeds Metropolitan University (which houses the largest business school of its kind in the UK)
From Dublin: Ryanair runs daily flights from Dublin to Leeds Bradford
Transport links: Leeds Bradford International Airport with flights daily to all major European destinations. Intercity Rail runs an hourly service to London which takes two-and-a-half hours. Leeds Supertram will serve major development sites in Leeds when completed in 2008.
Estate agents: Morgans City Living (tel: 0044 113 3980099); Hunters (tel: 0044 113 2182446); Knight Frank (tel: 0044 113 2461533) which is associated with HOK Residential (tel: 01-6181300)
