As we head into the New Year, all the signs suggest that 2015 will be another great year for both Leeds and its property market.
There’s no doubt that as Leeds continues to enjoy a fast improving city centre living environment and a truly dynamic economy, the city apartment market will continue to flourish and the steady capital growth that apartment values enjoyed in 2014 will continue in 2015.
However, the rentals market will still dominate market activity. We manage the city’s largest residential rental portfolio and continue to experience soaring numbers of potential tenants and a shortage of high quality apartments across the city centre with occupancy rates at more than 99%. Apartments that are available are generally not on the market for long and anyone looking to rent has to move quickly to secure a property when they find one they like.
Unfortunately, the supply problem isn’t going to get fixed in 2015 – or even in 2016. Leeds is the only major city in the UK without a significant city centre residential scheme currently on site and yet it has such a strong economy.
We also expect the sales market to continue improving in 2015. Investor activity will increase as rents outstrip capital growth and last year we saw growing numbers of owner-occupiers and first time buyers snapping up apartments as the availability of mortgage finance improves. The British have always been a nation of homeowners and although the rentals market is fierce, the majority of people who are renting aspire to buy their own home.
There is likely to be some disruption to the market around election time which will provide the usual distraction and will inevitably lead to some reticence around decision making. The spectre of an interest rate rise will undoubtedly provide an excuse for the waverers, but then again, so will the snow – we do not expect a rate rise until late in the year. The snow will come first!