9 July 2014
Residential development in Leeds city centre ground to a halt in the recession.
But homes in the heart of the city are still hot property. Peter Lazenby reports.
When the western world's economy nose-dived, Britain's construction indust
The industry is traditionally a harbinger of economic boom or bust, but this time it was a later victim as internationally-renowned banks went to the wall and the funding to keep developments on track dried up.
Leeds, with one of the fastest-developing city centres in the country, bore its share of the suffering.
In recent years Leeds city centre has seen three main types of development – retail, office and residential. The effect of the crash on residential development in the city was particularly dramatic.
Up to 2007 it enjoyed an unprecedented building boom. By autumn of 2007, planning permission had been granted for more than 30 schemes involving 9,920 residences concentrated in an area roughly bounded by Clarence Dock, Richmond Hill, Mabgate, Lincoln Green, Little Woodhouse and Wellington Bridge.
The projects would have seen the continuing development of a "city village" in the heart of Leeds – an ambition promoted by Leeds City Council for over a decade for the establishment of a residential community in the city centre.
Then came the recession.
Initially, the unreliability of share investments led to a surge of money into property – which was deemed to be 'safe'.
But with the drying up of funds, plummeting land prices, rising unemployment, and loss of buyers due to increasing uncertainty about the future of property prices, not a brick has been laid in most of the planned projects.
Only two schemes are likely to be completed over the next five years, involving 600 to 700 flats or apartments.
The freeze on development has, of course, been mainly bad news, with the loss of hundreds of construction workers' jobs in Leeds, and with hundreds more failing to materialise as plans were put on hold.
But one knock-on effect has actually been positive – the stabilisation of the city centre residential market which at one stage in the building boom was in danger of becoming saturated with newly-completed, unoccupied flats and apartments.
The glut of residences being built reached a point where Leeds was reported to be the 'empty flats' capital of the North, as newly-completed developments stood empty and at the same time hundreds more flats and apartments were in the pipeline.
One effect of the glut was to freeze and even lower prices and rents.
Sale values dipped from the fourth quarter of 2007. But in 2009 they stabilised. By this time many new projects had been abandoned.
Now a study involving the University of Leeds has shown that the 'empty flats' reputation is fading. A revival in the city centre residential market appears to be underway.
The study revealed an occupancy rate of more than 92 per cent of more than 3,000 city centre properties controlled by the major agencies in the city.
The University of Leeds worked on the study with property agents operating in the city centre – Knight Frank, Morgans City Living, King Sturge, Savills and Allsop.
Rachael Unsworth from the university said: "The research reveals that the market has contradictory features: there are high levels of occupancy in city centre apartments, yet development is at a standstill."
The report points to the need for a more gradual level of development of new residential properties in and around the city centre, rather than the frenzy of building which lasted until late 2007.
It also wants to see greater co-operation between the public and private sectors, and a broadening of the types of homes being built.
"This collaborative survey corrects some misapprehensions about the Leeds market," said Rachael Unsworth.
"There has been great co-operation between the agents in drawing together the evidence and interpreting it.
"Now there should be co-operation between the public and private sectors to ensure that the next phase of development is as coherent as possible, creating environmentally-sound buildings in pleasant settings which appeal to occupiers for the longer term."
