Erroneously dubbed the “empty flats capital of the North”, Leeds city centre ended the property boom on a low, like a D-list celebrity pilloried for being all fur coat and no knickers.
One London-based architect, Maxwell Hutchinson, even declared that the new apartments would be the “slums of the future”. He was wrong.
The city centre is a now a star performer and one of the most sought-after locations in Leeds, especially popular with young professionals keen to live close to work and play.
The lettings market has gone stratospheric and, according to Jones Lang LaSalle’s latest report, sales are 50 per cent up on last year and stock is low.
Guy Ackernley, head of residential at Jones Lang LaSalle’s Leeds office, says there is now a chronic shortage of apartments to let and buy.
Jonathan Morgan, of Morgans, has just reported record rental occupancy levels of 99 per cent with three or four would-be tenants fighting over every vacant property.
Over at Countrywide, which owns Bridgfords and Flatsinleeds, Jordan Yorath has the same problem: “We are experiencing demand that outweighs supply. If you are searching for an apartment it is a difficult time.
“The issue is compounded by an improving sales market, as first-time buyers have little choice other than to purchase properties that were previously let.”
All the agents believe there is an urgent need for new apartment schemes, but even if developers respond, supply is unlikely to improve for the next few years.
There are 11,000 apartments with 14,000 residents in the city centre and Leeds City Council say there is planning permission for 6,097 more flats in core and fringe areas.
Yet only one or two schemes are likely to get off the ground anytime soon.
Marshall CDP is hoping to start on 77 apartments at the old Thistle Hotel site at Calls Wharf in spring next year. They should be complete in 2016. There are suggestions that work may begin on another 230 flats in the city within the next two years, but there are no signs yet that Taylor Wimpey will revive its mothballed Green Bank site on Globe Road.
The company has permission for 887 flats and has submitted a revised planning application.
“Developing in the city takes time even if you have planning permission. It can take up to a year for tendering contracts and then another two to three years until the build is finished,” says Mr Ackernley.
One hope is that developers will seize the chance to build-to-rent, selling on to pension funds rather than to individual buy to let investors, as happened in the last boom.
“Pension funds and big institutions are looking at buying in Leeds but there is nothing for sale,” says Mr Ackernley.
“It’s a shame because that model works well. The funds demand high quality schemes because they are investing for the long-term.”
Rushbond’s Crispin Lofts, the city centre’s biggest ever built-to-rent scheme, is testament to how well it can work. Its 82 apartments are a far cry from the “rabbit hutches in the sky” seen in some older developments and they were snapped up by tenants.
Jordan Yorath, who believes rents may be pushed higher due to lack of supply, suggests that turning old office space into flats could also form part of the solution, especially as the Government has relaxed rules on change of use from commercial to residential.
He says that older buildings struggle to compete with grade A offices and turning them into homes would guarantee year-round occupancy and income for the freeholder.
For those who invest in city living, rental yields stand at healthy 6.5 per cent, with an average one-bed flat costing £110,000 and renting at £575 per month and an average two-bed from £160,000 and renting at £750.
Jonathan Morgan adds that the bulk of city centre apartments are always likely to be occupied by renters.
“Rather than seeing this as an unhealthy imbalance, we see a vibrant and well-supplied rentals market as a vital component of an economically and commercially successful city.
“As the provision of city centre amenities grows, such as a varied and eclectic evening economy and the provision of great public spaces, it is clear that there will be even more reasons for the next generation to make their home here.
“We look forward with a great deal of confidence in what is now one of the most vibrant places to live north of London.”