New Builds in Leeds: A Modern Landscape in Progress?
In this article, we look at new builds in Leeds and those in the pipeline, how new builds are helping to revitalise the city and present capital gains and rental opportunities that investors can take advantage of.
Leeds has caught the eyes of property investors for the last decade. As the cityscape continues to evolve, new developments are reshaping the Yorkshire city, making it a hotspot for modern living.
The rise of the ‘build to rent’ trend presents investors with new, lucrative opportunities, reflecting the changing dynamics of urban housing. At the same time, a growing number of mixed-use developments are enhancing the city’s livability, offering facilities that cater to a wide demographic.
Residential New Builds: Modern Living Spaces Taking Shape
A new build is a newly constructed residential property that has not been previously occupied. New builds can range from individual detached homes, semi-detached houses, terraced houses, flats or apartments.
New builds might be standalone properties or part of larger development projects that include multiple houses or apartment blocks. In contrast to older properties that might have had multiple previous owners or tenants, newly built properties are constructed from scratch and have not been lived in.
Other features that make new builds stand out from other housing stock (and add to their appeal) include:
- Modern Standards
New build properties in the UK are generally constructed to meet modern building regulations and standards.
Many new build homes come with a warranty, such as the 10-year National House Building Council (NHBC) warranty. This warranty covers any major defects in the building work.
- Developer Specifications
Buyers of new build properties, especially those who buy off-plan, may have the opportunity to customise certain aspects of the property. This can include choosing kitchen units, floor finishes and sometimes the layout.
- Incentive Schemes
The UK government introduced schemes like the Help to Buy equity loan (2021 – 2023) to assist buyers in purchasing newly built properties. Under such schemes, buyers may only need to provide a smaller deposit, with the government loaning a portion of the property’s value.
What are the Benefits of New Builds in Leeds?
The three main benefits that new builds offer occupiers are:
- Energy Efficiency
New builds are constructed to meet current building regulations and standards, often emphasising energy efficiency and sustainability. This results in better insulation, modern heating systems, double or triple glazing and other energy-saving features. Homeowners can benefit from reduced energy bills, a smaller carbon footprint and a more comfortable living environment.
- Low Maintenance and Warranties
Since everything in a new build property is brand new, there’s typically less maintenance required in the initial years compared to older properties. New build homes also come with warranties, meaning the developer or warranty provider will address major defects or issues with the construction.
- Customisation and Modern Amenities
New build properties (especially those purchased off-plan) offer buyers the opportunity to customise aspects of the home to their preferences. New builds also come with modern amenities and design features that cater to contemporary lifestyles, such as open-plan living spaces, en-suite bathrooms and integrated technology.
While new builds offer numerous benefits, they can also come with several drawbacks. Here are some of the main concerns associated with new build properties that investors will want to keep in mind.
- Potential Delays
Construction timelines can be unpredictable, and factors such as weather, supply chain issues or labour shortages can lead to delays. Buyers who have committed to a move-in date might find themselves in a difficult position if their new home isn’t ready on time.
- Initial Defects
It’s not uncommon for homeowners to discover minor issues once they move in. These can range from poorly finished paintwork to more significant problems like faulty wiring or plumbing.
A recent article by The Guardian highlighted rising concern about the quality of new-build homes in Britain. Many new properties have issues such as cracked tiles, misaligned gutters and leaning walls.
The rise in shoddy construction has led to the emergence of “professional snaggers”, companies hired by homeowners to inspect their new properties and report on issues.
There’s a sentiment that big housebuilders prioritise shareholder interests over the quality of homes, exacerbated by the lack of competition in the market. In 1960, the 10 biggest housebuilders constructed just 9% of all homes, but now they account for more than 50%.
- Premium Pricing
New builds often command a higher price than older properties of a similar size and location. This “new build premium” means buyers might pay more upfront, and there’s a possibility that the property might not appreciate in value as quickly as an older home.
- Smaller Room Sizes
Modern new build properties, particularly apartments, can sometimes have smaller room sizes compared to older properties. This can result in less living space and storage.
- Less Character
New builds lack the character, charm and unique architectural features that older properties offer. Some buyers feel that new developments can appear somewhat sterile and lack individuality.
- Unfinished Developments
If a new build is part of a larger development, early buyers might have to deal with ongoing construction noise and disruption until the project is completed.
- Community Development
In entirely new developments, community amenities like shops, schools or public transport links might take time to establish, making it less convenient for early residents.
While these drawbacks exist, they don’t necessarily apply to every new build property. Investors need to weigh up the pros and cons associated with an individual property investment.
What are the Benefits of New Builds for Property Investors?
When considering property investments, many investors may want to consider new build properties. These modern constructions offer a range of benefits that can make them an attractive investment.
Here are some reasons investors might opt for a new build property over older real estate options.
- Financing Options
Developers often offer incentive schemes to attract buyers to new build properties. These can include reduced deposit requirements, developer-paid stamp duty or cashback offers. For investors, these incentives can reduce the initial capital needed and enhance the return on investment.
- Low Maintenance
Since everything in a new build is brand new, the initial maintenance and repair costs are lower compared to older properties. This can lead to savings in the early years of ownership.
- Predictable Returns
New builds in well-researched locations can offer predictable rental yields, especially if there’s a strong demand for rental properties in the area.
- Potential for Capital Appreciation
If the investor purchases a property in a new development that becomes popular and well-established, there’s potential for capital appreciation over time as the area becomes more sought-after.
- Off-Plan Purchases
Buying off-plan allows investors to secure properties at lower prices, potentially benefiting from price appreciation by the time the property is completed. This can also offer the opportunity to choose premium plots or units within a development.
- Establishing a Portfolio
For investors looking to build a portfolio, new builds offer the opportunity to purchase multiple properties within the same development.
- Less Competition
In some cases, there might be less competition for new builds compared to older properties, especially if there are many units available in a new development.
New Build Trends in the UK
According to Property Industry Eye, in 2023, demand for new builds decreased nationally by 14% year-on-year. However, there was a slight uptick of 0.7% in demand from Q1 to Q2 in 2023, hinting at some renewed interest.
Despite the overall decline, there’s cautious optimism for 2023 as slight demand growth was observed in Q2 compared to Q1. The future trajectory remains uncertain, especially given the current economic environment.
The UK’s Growing Build-to-Rent Sector
The Build-to-Rent (BTR) housing sector, offering purpose-built and professionally managed homes, has grown from 4.4% of UK houses in 2015 to 11.2% in 2022.
A shift towards single-family housing is a pattern emerging in the UK, especially as over-35s are the fastest-growing group of private renters. 62% of these renters have lived in their properties for three years or more, meaning the build-to-rent sector can offer investors a long-term income stream.
Here are some of the other benefits of the build-to-rent sector investors might want to consider:
- Strong Demand
The demand for rental properties is increasing, especially among specific demographics such as the over-35s. With rising property prices, many choose to rent for longer periods, leading to a robust demand for quality rental housing.
- Stable, Long-Term Income
BTR properties, especially single-family housing, offer a stable and long-term income stream. A significant percentage of renters stay in their properties for extended periods, ensuring consistent rental income for investors. Deloitte forecasts a steady 4-5% annual growth in rents for build-to-rent, aligning with anticipated wage growth.
- Professional Management
BTR properties are typically managed by professional companies, freeing up investors from day-to-day tasks and reducing vacancies.
New-build BTR properties are designed with the latest energy efficiency standards, providing cost savings for tenants, which may put them in higher demand from renters. New-build homes potentially save occupants around £2,600 annually compared to older properties.
New Build Trends in Leeds
Leeds continues to see a surge in new build property developments. Major Leeds property developers like Redrow and Miller Homes have completed projects and are actively seeking new sites for development across the city.
Here are some recently completed and upcoming developments in Leeds:
- Garforth Development
This recently completed project transformed an old factory site into 241 homes, all of which are now sold. The development included Aspen Park with Georgian-inspired townhouses and The Poplars with mainly detached homes.
Developer Redrow is actively looking for new development opportunities in Leeds. A planning application for 925 homes, a community hub and a primary school has been submitted for Manston Lane, Crossgates.
House prices in the Leeds suburb of Crossgates have shot up 43% in five years, compared to an average rise of 26% across the rest of city—making it an area investors might want to keep an eye on.
Leeds developments by Miller Homes continue with the acquisition of land in Collingham for 129 homes. Collingham is the second-highest earning area of Leeds with average annual salaries reaching £62,800
- Stonebridge Mills, Farnley
Two miles west of the city centre, this £25 million development delivered 112 homes. The old mill building now includes spacious new family homes, while a terrace of cottages, which once housed the mill workers, has been rebuilt. New properties have been built from scratch on the once-derelict land.
- Laneside Farm, Churwell
This controversial development by Persimmon Homes saw the completion of 450 homes and a primary school despite opposition from the local community.
- North of Wetherby Racecourse
Taylor Wimpey received planning permission for a development including 785 homes on land north of Wetherby Racecourse. Including a shop, primary school and public spaces, the development is described as “one of the biggest changes to Wetherby in 50 years”. The development will include approximately 16 hectares of green space, including play areas and an informal nature reserve incorporating the existing Cockshot Wood.
- Leeds Riverside Development
Town Centre Securities (TCS) secured planning permission for the next stages of the Whitehall Riverside mixed-use development in Leeds. The initiative seeks to establish a distinctive neighbourhood in Leeds’ West End, an area currently experiencing a surge in development.
The Leeds Riverside Development project will comprise two energy-efficient office buildings, a state-of-the-art CitiPark car park, a travel hub with a renewable energy facility, a hotel/aparthotel and 500 residential units, already under construction. The CitiPark facility is anticipated to be the North of England’s premier EV charging hub, opening early 2024.
When it comes to these developments, many have received a mixed response with some facing opposition from local communities. However, developers emphasise the creation of communities, regeneration of brownfield sites and meeting the demand for new homes in the region.
Leeds’ Development Trends: New Builds and Cultural Investments
Leeds is evolving as a hub for sustainable residential developments, cultural investments and a revitalised retail scene. The city’s strategic development, focusing on sustainability and community-oriented spaces, positions it for a promising future.
Leeds’ South Bank area is the focal point for new residential projects in the city, with six out of 15 ongoing developments. Emphasis is on repurposing existing buildings, like old office spaces and Victorian schools, to align with sustainability targets.
New build homes in Leeds are part of this trend and the city is evolving with five key themes emerging:
- Following the European City Model
A shift towards mixed-use developments in Leeds highlights the European city model, neighbourhoods offering diverse amenities for various demographics. 10 ongoing residential projects in the South Bank provide a mix of one to three-bedroom apartments totalling up to 3,226 units.
- Retail and Commercial Space
Mixed-use schemes in Leeds South Bank are home to small-scale retail and commercial spaces. This includes SOYO (phase 2) and Whitelock Street Student Development, which adds 37,907 sq. ft of commercial space to the area.
- Cultural Investments
The refurbished Hyde Park Picture House completed in Q1 2023 is an example of cultural investments in the city. 2023 is Leeds’ Year of Culture, and potential improvements to Elland Road, depending on Leeds United’s Premier League status, will further enhance the city’s cultural and entertainment offerings.
- Retail Revitalisation
The former Debenhams building will now host a Leeds Flagship Flannels store. Although Leeds’ retail footfall decreased by 16.3% compared to 2019, it aligns with the national average, indicating a slow but steady post-pandemic recovery.
- Hotel Sector
Given the rising investments in public spaces and cultural attractions, there is a trend towards luxury hotels. 2022 saw the initiation of two hotel projects, the Hyatt at Sovereign Square No.2 and the Jubilee Hotel, delivering 392 rooms by Q1 2024. The Wesley Hotel, a refurbishment of a Grade II listed former Methodist Church offering 70 rooms, is also in the pipeline.
Residential, Commercial and Retail Developments: Energising Leeds’ Business Scene
Leeds has surpassed its traditional boundary and new build homes Leeds are expanding into regions like the South Bank, Water Fringe and beyond the Inner Ring Road. This growth positions Leeds as an expanding urban centre, meaning there are ample development opportunities for investors.
- Residential Boom
The residential sector in Leeds has witnessed a consistent rise, especially in the Build-to-Rent (BTR) segment. With an 8.1% increase in population from 2011-2021 and a 35% of graduates retaining residence post-studies, the demand for housing is evident.
The Crane Survey by Deloitte highlights the city centre’s robust housing demand, with rental growth reaching double digits in 2022. BTR investments have surged, with Leeds receiving £200 million investment in this sector in 2022, leading the UK’s regional cities.
- Student Housing
Leeds is an academic hotspot, home to 6 globally renowned universities, a further education college and Europe’s largest teaching hospital trust. With over 70,000 students, the city’s educational sector is vibrant and growing.
The influx of students led to a surge in Purpose Built Student Accommodation (PBSA), with 2022 seeing a record number of constructions, adding 3,294 new beds. This student population, backed by state-of-the-art research facilities, positions Leeds as a magnet for businesses seeking fresh talent and makes a profitable rental sector available to investors.
- Commercial Sector Leeds
In the commercial sector, 858, 448 sq. ft of office floorspace is under construction in Leeds. 2 new hotel schemes started in 2022, 5 residential developments and five public realm schemes are under construction, including Aire Park and the sustainable Travel Gateway—connecting the Leeds sustainable travel program, Leeds railways station and the pedestrianisation of the city square.
- Office Spaces
Leeds city centre has seen a dynamic shift in its office space construction, with a focus on ‘Grade-A’ spaces with sought-after amenities and eco-construction. The drive towards sustainable buildings is more evident with the introduction of zero-carbon developments in the city.
Mixed-Use Projects: Creating Dynamic Spaces for Work and Play
10 residential developments are under construction in Leeds, providing a housing mix of one, two and three-bed apartments, adding 3,226 units to the city in total. The increase in the number of three-bed apartments will bring in young families and create mixed communities in the city centre.
Mixed-use developments in Leeds are increasingly focusing on the amenities they provide. There is a movement towards a more “European” model of cities, which focuses on neighbourhoods that offer a variety of demographics and services within a short walking or cycling distance.
Here’s why investors should keep an eye on investments in mixed-use developments:
Mixed-use developments in the city are placing a significant emphasis on providing amenities. This shift mirrors a European model of urban planning, where cities comprise a series of neighbourhoods that cater to a range of demographics. These neighbourhoods offer diverse amenities and services within short walking or cycling distances.
- Housing Diversity
An increasing number of mixed-use developments in Leeds offer various housing options. Specifically, there’s a trend towards having a mix of one-, two-, and three-bedroom apartments in these developments. This variety is expected to draw diverse residents to the city centre, including young families, thereby making mixed communities.
- Affordability and Community
There’s a focus on ensuring that rents are aligned with local incomes. This approach aims to create housing that benefits the community and offers resilient investments.
- Commercial and Retail
Developments like Calls Wharf, Crown Hotel and The Store House will add to the city’s commercial floorspace, particularly in areas like the Water Fringe.
Overall, mixed-use developments in Leeds are evolving to meet the diverse needs of its residents, offering a blend of residential, commercial and retail spaces that promote community engagement, sustainability and convenience.
New Builds Leeds: A Focus on Sustainability in the South Bank
Leeds’ focus on better neighbourhood creation is becoming increasingly environmentally and socially sustainable. The city is focusing on designs that integrate green infrastructure and a variety of amenities to create places where people want to live.
- The Guinness Partnership’s Point Cross development will build on the existing investments and green infrastructure in the South Bank, set to bring forward over 900 residential units.
- Investment into the South Bank in the Temple district, which once was defined by textile and manufacturing industries and is now a mixed-use community, will provide a vibrant neighbourhood to the south of the city centre.
- The Temple Masterplan is at the forefront of the South Bank’s growing success, with various schemes underway, including Labcorp’s emerging research facility at Drapers Yard and prominent lettings at the newly completed Globe Point.
Add these developments to the recently completed residential offerings in the area, such as the Ironworks, and it is clear that the South Bank is fast becoming one of the city’s most vibrant areas.
Community Impact: Enhancing Neighborhoods and Connectivity
New builds have a profound impact on communities. They transform the physical landscape and play a pivotal role in enhancing social connectivity, economic growth and overall community well-being.
- Revitalising Underdeveloped Areas
New builds in Leeds often transform previously underutilised or derelict areas into vibrant communities. They bring in infrastructure, amenities and aesthetic improvements, leading to an overall enhancement of the neighbourhood’s ambience.
- Providing Modern Amenities
Most new builds in Leeds are equipped with modern amenities such as community centres, parks and playgrounds. These facilities become focal points for community interactions, fostering residents’ sense of belonging and unity.
- Improved Transportation and Connectivity
New builds often improve transportation facilities, leading to the development of better roads, public transport options and pedestrian-friendly pathways. This enhanced connectivity makes it easier for residents to commute and make other areas of the city more accessible.
- Environmentally Friendly Design
Modern new builds often emphasise sustainability. Incorporating green spaces, and energy-efficient designs benefits the environment and creates healthier living spaces for residents.
New Builds, Transforming and Greening Leeds
New builds in Leeds are increasingly focused on sustainability. This is in response to a number of environmental-focused policies that are transforming the city:
- Grey to Green Scheme
The ‘Grey to Green’ Scheme by the City Council focuses on enhancing climate resilience by integrating green space and green infrastructure.
Key areas seeing a transformation include the Corn Exchange, Meadow Lane, Crown Point Road and Sovereign Square, all aimed at establishing the South Bank neighbourhood and facilitating better pedestrian and cyclist connections to the city centre.
The city has a 25-year initiative to plant 5.8 million trees and a commitment to become carbon neutral by 2030.
- Our Spaces Strategy
The ‘Our Spaces Strategy’ is Leeds City Council’s vision of a people-centric and culturally vibrant city. One example is Meadow Lane, which offers a pedestrian and cycleway, ensuring safer and more convenient movement.
The Meadow Lane project has set the stage for the development of the new Aire Park, due for completion in Autumn 2023. This park, the largest of its kind in the city centre, underscores Leeds’ ambition to prioritise green spaces and enhance pedestrian and cycling paths to make the city more accessible.
New Build Developments Leeds: Mixed-Use Developments on the Rise
Leeds is also experiencing a surge in mixed-use developments that promise to redefine its skyline. Should you invest in a new build house Leeds? Here are some notable new housing developments in Leeds:
The importance of the South Bank in Leeds’ development can’t be understated. The Guinness Partnership’s Point Cross development is poised to augment the existing green infrastructure, with plans to introduce over 900 residential units. Ongoing and anticipated developments in the South Bank will further boost its appeal.
The City Reach site in the Leeds’ Kirkstall Road area, is set for a major development with around 1,050 residential units (BTR, private for sale and affordable housing), 309 student apartments and a significant public realm project.
The Store House
The Store House is a design-led student accommodation scheme offering 369 student spaces and 3,099 sqm of retail. Inspired by its historical significance as a Victorian hotel and department store, the development is led by Corstorphine & Wright Architects and Project Studio. The design aligns with the ’15-minute city’ concept, promoting urban rejuvenation and multifunctional city centres.
Calls Wharf is home to over 30 modern and stylish riverside workspaces located in the heart of Leeds’ creative quarter, close to the train station.
These developments will introduce nearly 15,000 residential units and over 55,000 sq. ft of commercial space.
Future Prospects for New Builds in Leeds
The Whitehall Road project was recently recommended for approval by Leeds city councillors. The development includes a cluster of office buildings and a multi-storey car park on the banks of the River Aire. 500 riverside residences in two high-rise blocks, standing at 19 and 16 storeys will be positioned conveniently near Leeds’ main train hub on Whitehall Road’s existing car park.
The historical industrial plot on Kirkstall Road, previously owned by engineering giant Thyssen Krupp and left deserted after the 2015 floods, is projected to house 130 new affordable homes.
Former Arla Foods Location
The development of 618 apartments on The former Arla Foods site was given the green light in early 2023. Near Leeds’ western ring road, the former dairy site, which has been empty for nearly 20 years, will be converted into a new £140 million development.
A total of 618 residential properties will be created, with monthly rental costs for tenants likely to be between £900 and £1,100. 31 properties within the scheme will be classed as affordable.
The Transformer Tower
A new addition to Leeds’ skyline will be ‘The Transformer’, a 31-storey building. This tower will accommodate 399 apartments within the vicinity of Wellington Street, near the iconic old Yorkshire Post location.
What are the Up-and-Coming Areas of Leeds and its Surroundings?
Thanks to the completion of the East Leeds Orbital route in Autumn 2022, this area of the city is a growing focal point. The infrastructure upgrade facilitates numerous new housing developments, meaning more new builds in Leeds.
Nearly 300 homes will be built as part of a supersize east Leeds development. Detailed applications by developers Taylor Wimpey and Cullen Land outline a plan to build 293 properties in the middle quadrant of the East Leeds Extension (ELE). Known as Morwick Springs, these homes will form a small fraction of the overall ELE, which is being built across hundreds of acres of land along and around the new East Leeds Orbital Route.
Prices in the city centre are set to increase, driven by an influx of new businesses and residents. Neighbouring suburbs, like Holbeck, will also benefit from new investments and a rise in property prices, making it a good location for a new home in Leeds.
With the rise in remote working, properties with dedicated home offices or convertible spaces will be in high demand. Similarly, properties offering outdoor spaces or located near parks and community events will be sought after. Areas like Kirkstall, Burley, Roundhay, Oakwood, Chapel Allerton, Meanwood, Pudsey and Farsley are prime spots for young professionals and families.
Leeds Dock, Hunslet & Stourton
Encompassing the modern Leeds Dock area, combined with the historic neighbourhoods of Hunslet and Stourton, this region offers a blend of heritage and contemporary living.
The area has experienced a notable uplift in the past decade. By 2021, 54.9% of households were not considered deprived (in contrast to 31.2% in 2011), reflecting the area’s ongoing development and appeal.
East End Park & Richmond Hill
These neighbourhoods, located to the east of the city centre, offer a mix of residential and green spaces, making them attractive for families and professionals.
Holbeck, historically an industrial area, has been undergoing a transformation, blending heritage with modern residential and commercial developments.
400 brand new apartments are coming to Holbeck in a £100 million development named South Bank Riverside.
In addition, the former Kays warehouse site redevelopment in Holbeck was approved in March 2023. The site formerly housed the Kays Catalogue warehouse and will comprise 451 flats in a residential block of three linked towers of 10, 12 and 14 storeys running west along Sweet Street; an 8-storey office block facing Marshall Street; the renovation and extension of the Commercial pub on the corner of Sweet Street and Marshall Street; and a 4 storey ‘pavilion’ providing social spaces for the new residents.
Cities surrounding Leeds are also benefiting from its growth. The north side of Wakefield, including regions like Outwood and Stanley, is predicted to surge in property prices. Proximity to Leeds and the availability of amenities at competitive prices make these areas attractive.
Leeds is poised for a promising future in the housing and development sector. The consistent growth in Build-to-Rent, the rise of student housing and the emphasis on sustainable and mixed-use developments indicate that investors can benefit from a growing property market and increasingly liveable city. As new builds in Leeds continue to transform the city and present investors with opportunities, Leeds remains a city to watch in the UK’s property landscape.