There are a number of factors that influence the tenant numbers in local rental markets and it is becoming increasingly important for buy-to-let Landlords to assess these before purchasing a rental property. The top ten factors in Leeds are:
1. Fast growing tech sector
This is believed to be the most influential reason in increasing tenant numbers. This is because the employment and turnover growth rates in the UK tech sector significantly outperforms all other industries. There are over 3,500 digital organisations in Leeds. It is home to the Northern Internet Exchange and IX Leeds, which makes Leeds the only internet independent city in the UK outside London. Leeds was also among three cities to share £11m in government funding to develop technology hubs.
2. Visitor destination
According to Visit Britain, the number of nights visitors spent in the UK increased by three per cent in 2015 to 273 million, with short term holiday lets a popular choice for those seeking to explore the UK. Leeds has over as over 1,000 shops and consistently ranks at the top of shopping league tables meaning it is a popular visitor destination. It has just welcomed Victoria Gate which is home to the largest John Lewis department store outside of London.
3. Centre of excellence
The areas that score highly in this category either benefit from a Russell Group University, a thriving start-up economy or have a high volume of jobs in the creative sector. Leeds ticks all of these boxes - it has Leeds University, a top 20 Russell Group and a growing business network.
4. City living culture
Levels of renting amongst the younger generation are at an all-time high and apartments dominate cities, making these the most lucrative investment properties. Leeds hosts a population of 65,000 students and even more young professionals - it is therefore key for Landlords to target this demographic.
5. Development activity
The areas experiencing the greatest increase in housing stock or the locations of significant future planning schemes are both indicative of a dynamic economy, thus boosting tenant interest. Leeds is a hub of development making it a great place to invest.
6. Infrastructure investment
44 enterprise zones and 30 housing zones have been selected by the government across the UK as focal points for tax breaks and development. New employment and housing will help fuel demand for rental property in these areas. The new airport and HS2 railway plans will also boost tenant numbers in Leeds.
7. Policy support
Significant public funding has been promised to drive investment and employment within growth areas such as the Northern Powerhouse meaning that these areas will have a high housing demand.
8. Student population
There are three universities in Leeds; Leeds University, Leeds Beckett University and Leeds Trinity University. These collectively host a total of 65,000 students.
9. Young professionals
With the average age of a first time buyer now 33, up from 30 just 20 years ago, demand for rental properties is high among young professionals in Leeds.
10. Commuter catchment
Major cities of the UK are the powerhouses of employment and economic growth. Most locations within these commuter zones tend to be investment hotspots. The UK's major cities have the highest tenant numbers - Leeds, Manchester, Birmingham, London and Cardiff in particular. The HS2 plans will link the major cities together providing quicker and easier access.
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