This Sunday, December 20, will see the first league fixture between Leeds United and Manchester United in 16 years. To mark the match, Savills has kicked off a housing market comparison between the two great Northern cities, revealing how their residential property markets have performed since 2004.
In July 2004, two months after Leeds United were officially relegated from the Premier League, the average second hand home sale price in the city was £130,000, a figure that has since risen by 69 per cent to £220,000 as of July this year. Average house price growth, which includes all property types, has increased by 48.4 per cent. In Manchester, these two metrics have jumped by 110 per cent and 86.9 per cent respectively.
Second hand detached houses in Leeds have, on average, yielded a higher percentage increase, 64 per cent, than in Manchester, where the rise is 59 per cent. However, analysis shows average second hand apartment sales in Leeds have increased by only 13 per cent since July 2004, whereas in Manchester they have jumped by 45 per cent.
Ed Stoyle, who is the head of residential sales at Savills in Yorkshire, says: “Leeds city centre offers very few opportunities to purchase a detached family house, which is why large numbers of people live a short commute away. Should Leeds United retain their Premier League status, it could take a few years for any noticeable trends on house prices, but suburbs such as Moortown, Moor Allerton, Alwoodley and Scarcroft are blessed with well-spaced, large family houses served by good transport links and schools which top flight footballers could be drawn to.
“The best houses in these areas can achieve £3m plus but, if Cheshire provides us with an example of the effect Premier League clubs can have on house prices, these property hotspots are only likely to get hotter.”
According to Savills, Harewood remains the highest value ward in Leeds, based on average second hand sale price, just as it was at the same point in July 2004.
The average price growth there since 2004 is 59 per cent. In terms of housing stock in 2004, both Manchester and Leeds had just over half a million homes between them. Leeds accounted for the majority, 62 per cent, of total stock. Since then, a combined total of almost 80,000 homes have been delivered across the cities.
Despite differences in size, both have seen very similar levels of delivery, with just over 39,000 homes built in each city since 2004, and while home building has had the biggest impact in Manchester – where the number of homes has increased by over one-fifth between 2004 and 2020 – Leeds, having started from a higher base, saw a lower proportional increase to dwelling stock, at just over 12 per cent growth in the 16 year period.
Jamie Adam, head of residential development sales at Savills in Manchester, believes that success for Leeds United could help address a gap in luxury city centre living. “A problem for the city of Leeds is its lack of high value, prime stock in the city centre. With the recent and timely rise of the football club, there may be opportunities for savvy investors to build high-end homes to service the requirements of the players and coaching staff.
“Suitable investment in the city will not only appeal to the local market but will also help attract the world’s top talent to Leeds United,” he says.
Savills says a rapidly growing population in Leeds has resulted in higher housing need and while a high volume of delivery has helped, annual delivery is 12 per cent behind demand. In comparison, investment has flowed into Manchester thanks in part to having two Premier League clubs in the city for a sustained period.
Matthew Jones, director and head of development at Savills in Leeds, believes retaining university students and the success of the football club will help drive the development market in Leeds. There are a number of examples of residential development sites in Leeds that, despite having planning consent, have not progressed since the economic downturn.
“One of the challenges in the next 12 months is to improve investor confidence and underwrite deals in the city which, in turn, will give developers the confidence to move things along.
“Leeds United remaining in the Premier League will play a part in renewed interest from domestic and international investors, while Channel 4 moving to the city will also provide comfort, but this needs to be built upon in a similar way to Manchester’s Media City in Salford. There is also the ongoing need to market the city and make it more appealing to investors. Retaining post graduates will also help fuel demand for apartments and the need for development.”
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