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A burning question thats been nagging me for a while is, where are all these people coming from that are going to live in all the apartments currently under construction in the city?

and how many more city living developments can Leeds accomodate before saturation brings the property market crashing?

Could the Brunswick Place developments decision to lean more towards office space rather than residential be the first hints of this?
 

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I was thinking about that too; obviously coming from somewhere otherwise people wouldn't keep building them. I think they're moving in from all over really; although particularly students that are getting well paid jobs- 'young professionals' they're referred to. Yes I agree it should start to go towards office development; there is demand for that now too.
 

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I know a young lady moving from Holbeck to a city centre apartment, although I don't think there will be a mass migration from this district to the city centre! Also a couple of people I work with have recently moved into these flats.

I did read recently in the property section of The Times that due to the flood of new developments coming onto the market in Leeds and Manchester that prices will probably fall due to supply outstripping demand so they should become more affordable to prospective buyers.
 

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If I can get a job in the area, I would probably move into one once I finish university in Newcastle. I love the whole apartment block/city living thing.
 

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I think a number of factors need to be considered here. One is the reduction over the years in the average size of households in the UK. According to the Office for National Statistics, there has been a decline in the average household size from 2.91 persons in 1971 to to 2.31 in 2002. If we assume a static population over that time of around 60 million people, then we would have needed over 5 million new homes just to accommodate the same number of people.

Another factor is the changing type of housing provision being built. According to the Leeds city centre housing survey commissioned by Linfoot's, "Across England as a whole, the proportion of detached houses built in 1997 was 44 per cent and flats 15 per cent. By 2003, detached houses made up 26 per cent of new residential building and flats 38 per cent. These figures are only for private housing and almost all housing association building is flats, so the real number of flats is even greater (Daily Telegraph, 15 March, 2004)."

This survey was undertaken in 2005 by a Leeds University researcher and is available on the City Council's website. It also contains the following statistics:

1806 units had been completed by Q1 2003

1687 units were completed between Q1 2003 and Q1 2005

2950 units were under construction at the time the survey took place

There was planning permission for 4440 units

Developers had plans for 7164 units

A total of 18,074 city centre units built, under construction or in the pipeline.


Whether this number is sustainable will, no doubt, be the subject of some debate. However, the Linfoot survey thinks it is and cites the fact that 90,000 jobs were created in Leeds between 1984 and 2003. A more recent statistic is that 47,000 jobs have been created in Leeds since 1995. The Regional Economic Strategy forecasts that more than 65,000 net additional jobs will be created in the Leeds city region over the next decade. This jobs growth, it is believed, will help fuel the continued growth in city centre living.
 

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I recently read that there is one estimate of 70-80,000 people wanting to live in Leeds city centre. If so, saturation is some way off yet.

The more the centre population grows, including increased and improved facilities and publicity, the more the attraction grows, increasing demand further.
 

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This has been my bread and butter for the last 2 years...

There are just over 5000 apartments complete in Leeds "City Centre".
"City Centre" is becoming more and more of a subjective term...

Most new developments that have completed in the last 18mths / 2yrs have been sold to investors. These investors have bought <90% of these developments "Off plan".

By my reckoning at least 50% of these investors have bought the flats intending to 'flip' them, ie sell the apartment (making some money) before they have to 'complete' and get a mortgage.
Again by my reckoning only a mere 10% have been fortunate enough to flip their investments and perhaps as few as 5% will have made any worthwhile gains.

This means that there were 50% of the investors who bought with the primary intention of renting the apartments out as an income generator, with capital growth as the secondary (though no less important) investment aim.
However there are now an an extra 40% more of the initial investors aiming to subsidise their initial investment plan by renting these apartments out.
These investors are more exposed and as such are more desperate to cover their unexpected costs than the investors who were looking at buy-to-let in the first place.

This has resulted in a larger number of properties available to rent out (forcing the prices being acheived for rentals down).
There are also now more vacant properties, as investors are now hanging out for that one tenant who is willing to pay top dollar, so they can still make a quid or two, and aren't interested in renting them out at a small loss in the short term. (A foolish strategy if you ask me!)

Still with me?
 

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The same can be said for the sales market.

On average property prices in the city centre are down 10% in the last 12 mths. (In some cases as much as 15-20%!!!)
This means that alot of these investors are now sat on empty properties which are worth less than they paid for them, and are unable to acheive enough rent to cover the mortgages that they have on them.

This is all very unfortunate for the few 'owner-occupiers' that are currently living in the city centre but want to move to the suburbs. They can't sell to make enough to move to a bigger property and no longer have the option of changing to a buy-to-let mtg and keep it as an 'investment'.

I reckon 25-30% of all the flats in Leeds are currently vacant - That is a HUGE number of apartments!


Fortunately there are no major completions of developments as far as I am aware (Ice Works / NYSt (total 100?) later this year maybe?) for the next 18-24 mths. This can only be a good thing for the city centre market (in the short term!).

In 2 years time there will be completions at: Gateway, Clarence Dock, East St Mills, Roberts Wharf, Bridgewater Place, City Island II; to name just a few - that a massive 1000-1200 apartments all completing within 6 mths of each other.

I'm afraid I don't know how the current market will deal with such a situation - especially as again, 90% has been sold to investors who only want to MAKE money and aren't concerned about life in the centre.

The average price for a 2 bed flat is currently £170k, for a 1 bed £135k - these figures will drop by as much as 20% in 2 years time leaving a hell of a lot of people in negative equity!!
Reposessions in the city are already on the increase.

People (owner occupiers) are still buying apartments, don't get me wrong! Though they are concentrating on the bargains (understandably).
Leeds needs to bring 50,000 new people into the city to work for there to be enough who want to occupy every flat in town.
Is that realistic in tne next 2 years??
 

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Rob said:
I recently read that there is one estimate of 70-80,000 people wanting to live in Leeds city centre. If so, saturation is some way off yet.

The more the centre population grows, including increased and improved facilities and publicity, the more the attraction grows, increasing demand further.
Agree 100%.

Maybe there will even be a GP practice once all these 80,000 people move in :gossip:
 

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Stig282 said:
Leeds needs to bring 50,000 new people into the city to work for there to be enough who want to occupy every flat in town.
Is that realistic in tne next 2 years??
I was with you until this bit. Where does the 50,000 come from?
 

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well - if you have 8% of those who want to live (buy/rent) in town you might acheive it. Even with a take-up rate that high, I'm being optimistic.
Too many workers with families (30+ bracket) want to live in the suburbs, so that's most of your senior skilled/management out of the equation.
Only leaves graduates and young professionals. Not all those will be on a salary of £30k+ per year to be able to afford to buy a flat in town.
 

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Stig282 said:
well - if you have 8% of those who want to live (buy/rent) in town you might acheive it. Even with a take-up rate that high, I'm being optimistic.
Too many workers with families (30+ bracket) want to live in the suburbs, so that's most of your senior skilled/management out of the equation.
Only leaves graduates and young professionals. Not all those will be on a salary of £30k+ per year to be able to afford to buy a flat in town.
Got you. Don't all workers with families (30+ bracket) want to live in the suburbs?!? I know i do!!

I wonder about this "market", whether it's created by people who have an interest in "city living" concept. A couple of years ago I attended this party/launch on the top floor of Flannels. It was in a flat (privately owned but recently built) and it was amazing. Huge floorspace, amazing aspect, a truly superb example of "city living". Recently a mate moved into a flat on the floor below, it's tiny, a glorified bedsit with a posh open plan kitchen. It's garbage.

The only people I know who could do the city living are older teenagers/young 20-somethings/recent graduates (obviously assuming they can afford it). The flats are too small for anyone who has any possessions (Furniture, books, records etc etc ), they are there for status not for practicality. Also, if you want families in town surely a school is required????? And they got rid of The City Of Leeds School.......
 

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Salient article from the Property section of Sunday Times (18/06/06).

Families feel the squeeze
The boom in city-centre living suits singletons in flats but houses are in short supply, finds Graham Norwood

A new scheme in Leeds promises to bring family housing to a city centre that has an oversupply of flats for single people, amid worries that other locations across northern England are suffering the same problem.
A £500m scheme by the developer Reland, to be built on two disused chemical factory sites totalling 20 acres near the Leeds-Liverpool canal, will include family houses and three- and four-bedroom apartments. There will also be offices and shops.

Mark Jackson, Reland’s managing director, says his new homes — to be completed from 2008 onwards — will be marketed to younger buyers who like the city-centre lifestyle and already live in some of the one- and two-bedroom flats that dominate the area.

But do not expect the return of terraces of two-up, two-down houses. Although Reland’s plans include some houses, the emphasis will be on large flats to satisfy government planning guidelines demanding denser developments. “We’re developing a model of family housing that can be accommodated within high-rise buildings,” says Jackson.

Reland’s scheme is the first in a decade to buck the trend of building smaller flats in central Leeds. The city has seen more than 3,600 new flats in the past three years with a further 2,400 now under construction, and another 9,750 seeking planning permission or being mooted by developers.

It’s the same story across the rest of the north of England. Figures from estate agency Knight Frank show that in 1995, fewer than 20,000 people lived in Manchester, Liverpool, Newcastle, Leeds and Sheffield city centres combined, less than 1% of the total populations.

Ten years on, 47,000 live in the five centres. Manchester comes top with 12,000, then Liverpool on 11,000. This has been a boom to homeowners in the centres, too; over the past decade they have seen price rises of up to 21% per year, according to the Halifax.

But in the past two years the number of new homes — almost always two-bedroom, two-bathroom flats designed for buy-to-let landlords to snap up and rent out to young single people or sometimes sharers — has soared ahead even of this population boom.

For example, Sheffield’s “pipeline” of new properties definitely being built by 2009 is 3,300, with Manchester on 4,800, Liverpool 4,500 and Newcastle 1,700.

Then add what Knight Frank calls “anticipated” development — the firm’s best guess as to what may be built after 2009 — and you get another 15,000-plus homes across the five centres. Well over 95% of these are expected to be one- or two-bedroom flats.

An oversupply of small flats skews the balance of the local population — centres are dominated by one- and two-bed units owned almost wholly by investor landlords, usually professional single twentysomething renters, who are disproportionately male. It also deters local authorities and private companies from creating the infrastructure required for family living.

Some property professionals warn that central Leeds, like other northern city centres where thousands of flats have been built, has not got enough family-friendly amenities.

“There’s a lack of basic facilities such as GP surgeries, dentists and convenience stores. There are no prospects of schools or green space. Land is simply too valuable,” says Richard Dean of Leeds developer KW Linfoot.

“It would be wonderful if developers built family homes in Leeds and other centres but it’s not happening except for a few cases. The idea of building dozens of flats on a site that otherwise might have just a handful of houses is too financially attractive,” says Dominic Grace, head of new homes at estate agency Savills.

But Jackson believes that by building larger flats he has cracked the problem. “The demand for family housing will grow as the new urban population ages from their early and mid-twenties to their late twenties and early thirties,” he says.

It’s perfect in theory. Now all we need is someone to provide the facilities for them, too.
Is the Reland development the site on Kirkstall Road, or the one across Crown Point Bridge to the side of Clarence Dock? Suspect it is Kirkstall Road. Good to see the developers are sort of recognising the problem and trying to cater for a certain demographic. Amazing to see that there's nearly 10,000 apartments seeking planning permission or in the 'vision' stage in the city centre. Phenomenal number really.

The Yarn Street development by ISIS is also providing town houses along East Street and I'd hope Tower Works includes several tall town houses to accompany the apartments. The chap from Linfoot doesn't mention the health centre / dentists etc proposed for Lumiere, but not to worry, am sure such a scheme needs little advertising in reality, prestigious as it is.
 

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From the April 06 Leeds Economy bulletin, clears up the question of what Mark Jackon of Reland is talking about:

The two former Yorkshire Chemicals sites have been acquired from the receiver by developer Glendale Group. Its Reland division wants to include offices, residential, retail and leisure in the 2.2m sq ft, £500m development which could create up to 4,000 jobs. The site on Hunslet Road has been renamed The Works (970,000sq ft on seven acres) whilst the Kirkstall Road site is called Bankside (1.3m sq ft on 12 acres). About 60% will be residential, with 600,000sq ft commercial
So two sites, one next to Clarence Dock, and one in Kirkstall. Regarding pleasant residential, I'd suggest Kirkstall will get the bulk, and the Hunslet Road site most probably commercial? Who knows, shall wait for planning application and launch. £500m is a massive development value, the last mooted around that value was Jan Fletchers City 1, and we all know what's happened there over the last 2 years (hint, bugger all!).
 

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Stig282 said:
This has been my bread and butter for the last 2 years...

There are just over 5000 apartments complete in Leeds "City Centre".
"City Centre" is becoming more and more of a subjective term...

Most new developments that have completed in the last 18mths / 2yrs have been sold to investors. These investors have bought <90% of these developments "Off plan".

By my reckoning at least 50% of these investors have bought the flats intending to 'flip' them, ie sell the apartment (making some money) before they have to 'complete' and get a mortgage.
Again by my reckoning only a mere 10% have been fortunate enough to flip their investments and perhaps as few as 5% will have made any worthwhile gains.

This means that there were 50% of the investors who bought with the primary intention of renting the apartments out as an income generator, with capital growth as the secondary (though no less important) investment aim.
However there are now an an extra 40% more of the initial investors aiming to subsidise their initial investment plan by renting these apartments out.
These investors are more exposed and as such are more desperate to cover their unexpected costs than the investors who were looking at buy-to-let in the first place.

This has resulted in a larger number of properties available to rent out (forcing the prices being acheived for rentals down).
There are also now more vacant properties, as investors are now hanging out for that one tenant who is willing to pay top dollar, so they can still make a quid or two, and aren't interested in renting them out at a small loss in the short term. (A foolish strategy if you ask me!)

Still with me?
:runaway: Stig you seem to know what you are talking about, what is your background on the subject. I am one of the investors you mention I have purchased a property in the Bridgewater Place development, my intention was to rent out the flat after completion, but after reading your comments I have alarm bells ringing in my head as to if I am walking towards a financial nightmare. Bridgewater looks like it is going to be a special development but I still can't help thinking that after reading your comments Leeds is heading towards a total saturation of city living appartments. A similar thing happened in Newcastle's quayside a few years back thinking about it. I still have time to think about my next move as BWP is way behind schedule, but what you say makes perfect sense and if your figures are near the truth then could be time to :runaway: ... What information have you based your figures on..?

A worried investor.... :bash:
 

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stevehewis said:
A worried investor....
The more worried investors will be out there, the sooner prices will fall (not that I wish that to your particular situation) and developers will start building for occupiers rather than investors, as jimbo's post suggests. There must be a correction in prices as they are absolutely unrealistic now.
 

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Steve, I'm a property valuer for a city centre estate agency...

I have always believed in giving 100% honest information, 100% of the time.
Talking up a market like Leeds is dangerous because it is so fragile.

Though I will say that when all things are considered it is only my opinion that I have put forward. All would do well to talk to as many people in the industry as possible as early in their decision making process as possible. Speaking to others who have been in the Leeds market for some time would also be beneficial.

Oh, BTW - I would love to be proven wrong / overly cautious.
 
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