The Future of Leeds City Region

The Future of Leeds City Region
 
Outlook and recommendations

10 November 2016, by Susan Emmett

Leeds City Region must develop in order to accommodate increased demand

 

Leeds city region is set for growth. However, growth will bring new challenges. In order to accommodate its rising population and workforce, the region needs to develop its infrastructure links which will facilitate residential and commercial development in both the city centre and wider city region.

As well as the expansion of the south side of Leeds station, there have been significant improvements to regional rail services through the new TransPennine and Northern franchises, which will significantly enhance connectivity. The second leg of HS2 will act as a major catalyst for further regeneration in the region.

Planning for growth beyond the boundaries of Leeds should be one of the priorities for a newly elected mayor. The devolution agenda provides an opportunity for this, with local authorities having more power over transport and local planning.

Leeds city region should be building 14,900 homes a year, but the city region is suffering a shortfall of 7,500 homes a year, which now needs to be addressed. The office market is also suffering from an undersupply of high quality office space. With only two years worth of supply in Leeds city centre, we anticipate 40% (1.2m sq ft) of the development pipeline will be built within the next five years.

The supply/demand imbalance within the office market has prompted the return of rental growth. Savills expects top rents to break the £30 per sq ft barrier by the end of 2019 and industrial rents to rise by 5.5% over the same period. Savills forecast that house prices in Yorkshire and Humber will rise by 10% over the next five years, and will start to outperform London from 2019.

FIGURE 4

Mainstream markets: five-year residential value forecasts

 
Figure 4

Source: Savills Research

NB: these forecasts apply to average prices in the second hand market. New build values may not move at the same rate

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