High life beckons again for city’s hot properties

WHEN I first came to Leeds back in 2000, I was invited to a launch party following the completion of two city centre penthouse apartments, each on the market for £500,000. I remember thinking it seemed an exorbitant amount at the time and it probably still is.

Yet people were willing to pay such sums of money for a panoramic view of the Leeds skyline which although it looked better than it did a century earlier when smokestacks and factories littered the horizon, it wasn’t exactly Monte Carlo. But in the first few years of the new millennium demand for city centre apartments and the cool, bachelor lifestyle that supposedly comes with it, soared.

The city centre was transformed as sleek new buildings began appearing at a phenomenal rate changing the city’s character on a scale not seen since late Victorian times. As the biggest financial centre, Leeds was seen by many as a beacon of prosperity.

Fast forward to 2008 when credit was no longer easily available and the need for sizeable deposits meant first-time buyers had to put their home-owning dreams on hold. Developers, keen to cash in on the allure of city centre living, suddenly had a glut of new apartments and no one to live in them. It was a similar scene in booming cities across the country with many high-profile developments mothballed.

Since then the housing market, apart from a few spikes, has largely been in the doldrums. It has meant that developers have had to come up with more imaginative ways of encouraging people into the property market. Urban Splash is one that has done just that. The developer has made a name for itself by taking disused landscapes and warehouses and transforming them into chic city centre living pads.

Its Saxton scheme, near Richmond Hill, in Leeds, consists of 410 newly refurbished flats in two remodelled housing blocks aimed primarily at upwardly mobile young professionals. This might sound a bit like the emperor’s new clothes, but these aren’t aimed at those with money to burn. Instead, one-bedroom flats start at £99,950 and two bedroom apartments at £134,000. But Urban Splash also offer shared ownership – a Government backed initiative – which allows people to buy a 50 per cent share for £50,000, with option to eventually buy their own place outright. There is also the chance to rent a flat with a view to buying in a few years time.

To be eligible for the scheme people need to have a household income of less than £60,000, not already own their own home and be in full-time employment. Nicola Wallis, investment sales director with Urban Splash, says the aim is to encourage people on to the property ladder.

“The biggest barriers for first-time buyers are the amount of deposit they have to put in and the affordability, so if someone’s not quite ready to buy as long as they qualify for the scheme they can rent a flat at 80 per cent of market rates for anything up to five years, which allows them to save for a deposit.”

The two building blocks have been refurbished by Urban Splash and the plan has been designed to focus as much on the outside areas as those inside. “The two-and-a-half acre gardens are completely private for the residents, there are barbecue areas and boules areas and we also have an allotment area with 97 plots, to encourage a community atmosphere and to help people to mix with each other,” says Wallis.

The whole scheme is due to be finished next month, with one block virtually fully occupied and the other half full before the final section of apartments have even come on to the market.

Wallis is clear why the scheme is proving so popular. “These flats are affordable, they’re easy walking distance of the city centre and they also have private parking and allotments, which you wouldn’t normally get. We also have a garden area which we think is the biggest private residents’ garden in Leeds, so it’s a real oasis.”

The success of the Saxton scheme comes as new research by property experts Jones Lang LaSalle shows that sales of new and second-hand homes in Leeds city centre have increased in the first half of this year. Their latest Northern England residential report says that continuing low interest rates and a belief that house prices are unlikely to drop much further, has encouraged potential buyers.

There are, of course, continuing fears of further economic turmoil and the small issue of banks lending the money people need, but the firm’s Leeds residential property director Guy Ackernley says demand is increasing for some flats and apartments in the city. “Before the credit crunch there was a huge demand for city centre living in Leeds fuelled by the buy-to-let market with developments sold prior to them being built. This did create issues in Leeds but the demand for city living has not gone away and it’s here to stay.”

He points to the success of a 282-flat development at Granary Wharf as a case in point. “That was launched in 2009 at the height of the credit crunch, but since then the flats have continued to sell and less than ten per cent are to investors, the rest are all owner-occupiers.”

He says the rental market in Leeds has “exploded” and even a sluggish sales market has started to pick up. “People are looking to buy but it’s all about location and quality. They want something with a riverside view and a bit of character. It’s not just about what the apartment is like inside, it’s about the quality of open space outside,” he says. “There has also been a big increase in parent purchases, they have money in the bank not doing much and see that it’s a good time to help their children on to the property ladder.”

However, there has been a lot of anecdotal evidence about the high number of empty flats in Leeds city centre over the past couple of years and an estate agent told me last spring that he couldn’t give flats away in some areas. But Ackernley says that although prices have dropped, on average by about 20 per cent, the belief that Leeds is full of half-empty buildings is a myth. “A high proportion of the city centre population are young professionals who go out a lot and the fact that people don’t see lights on in some apartments is a very unsophisticated way of measuring how popular a city is. What we have seen is the rental market has soaked up any potential over supply.”

There are about 10,000 flats and apartments in Leeds city centre, which sounds a huge number, but Ackernley claims there is a shortage of new city centre flats, with the Saxton and Granary Wharf developments the only two that have been on the go. “I can’t see where the next development will come from so there will be a shortage, but at the same time if you build the right product it will sell,” he says.

So what impact will this have? “The lettings market has been booming for a couple of years but rents have not increased significantly. However, we do believe that this will change as pressure on stock grows. With no new residential development planned over the next few years we believe there will be a shortage of supply in the city centre and this will eventually begin to force prices upwards,” he says.

“The property market is not fantastic at the moment but it’s on the way up and now is a good time to buy because there are some good buys to be had.”

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