Boom goes to the heart of Leeds

The housing market in Leeds is bucking the national trend of stagnation caused by rising interest rates and fear of collapsing property prices. It is, in fact, booming.

Crosby Homes released figures yesterday showing that it sold apartments in Leeds worth £20m last month. It has been described as the best month for sales in seven-and-a-half years. One week into October, sales are still booming.

David Waddington, the sales and marketing director of Crosby Homes Yorkshire, said: "The growth in Leeds totally contradicts the argument that the residential housing market is slowing down. The last month has been phenomenal and it continues to be a very hot market.

"We had £20m of sales, largely due to Clarence Dock in Leeds, the largest mixed-use scheme. September has been the best month in sales in the city centre market."

Clarence Dock is a big build development with 1,000 units, 6,500sq metres (70,000sq ft) of office space and 46,000sq metres of retail and leisure.

Already, more than 600 of the apartments have sold. The prices start at £130,000 for a one-bedroom flat.

Mr Waddington described Leeds as quite a young property market in terms of its evolution: only 3,000 people have embraced city-centre living. But it is developing rapidly because of the rise in blue-chip companies moving to the city.

Many more people are expected to want to move into the central area.

"Leeds has a fairly labour-intensive workforce," he said. "We have companies like the Halifax, KPMG, the Norwich Union, Asda Wal-Mart and the Bank of England. There is a lot of E-commerce, banking and legal industries.

"There are a lot of young people who work in the city centre and who now want to live there. The fact that Leeds is on the water, with the river Aire running right through the city, has been a catalyst for growth."

He expects that the value of property will increase by around 8% to 10% in the next year. The numbers are relatively small compared with Manchester, where an estimated 20,000 people will live in two years' time.

Mr Waddington said many city centre residents still had to get in their cars and drive to the suburbs to buy a pint of milk, but the infrastructure would eventually follow.

Leeds was saturated with unique selling points. "It is absolutely central to the country and is at the head of the motorway. The A1 runs up to Scotland to the east of the city and we are within a couple of hours of King's Cross.

"Arguably it is the clubbing capital of the north, and it has a real vibrant feel to it."

Naveen Ahmed, director of Parklane, which is one of the biggest rental agencies but also has a sales department and is a property developer, said city-centre living was in its infancy, but the market was very buoyant.

"We have seen the first signs of a bit of a slowdown," he said. "But it is nothing like the rest of the country. Investors are still buying but the change is there are more owner-occupiers. This is reflected in the prices, which are more realistic, and first-time buyers can afford properties."

A phenomenal number of restaurants and clubs had opened, creating a vibrant place for young people. But there was a need to encourage older people to live in the city centre.

"We have seen a few couples with little children move into the city centre, but there are not many families," he added.

Judith Oliver, managing director of the LS1 rental company, said studio apartments cost between £450 and £500 a month to rent, one-bed apartments about £650 and the best penthouses £3,000 a calendar month.

"The rental market has gone absolutely mad in Leeds," she said. "At the same time we can hardly keep up with the growth in the business. Clarence Dock has been extremely popular. Generally in Leeds, the market has grown very strong.

"It is quite a small city but over the last year there has been a significant growth in city centre living.

"We have more and more businesses coming to Leeds and more and more young people who want to live in the town."

Four years ago, before she started the business, there were just a few hundred people living in the city centre. However, with a rash of new developments, city-centre living had caught on in a major way.

"It is genuinely a very busy market," she added. "I am not just saying that. We used to have just a few hundred corporate people living in the city centre Monday to Friday. But now there is a real community feel, where everybody knows each other."