Leeds is fast becoming one of the most desirable cities for buy-to-let landlords in the north of England. A combination of high yields and a regenerating urban landscape is driving interest in the area.
Why is Leeds a good city for a buy-to-let?
Leeds is becoming more popular among buy-to-let investors for many reasons. The city is currently nearing the end of an epic transformation which has seen it morph from a working northern town into a vibrant metropolis.
For instance, Leeds focuses on significant private and government-funded regeneration schemes. The South Bank Leeds project will double the size of the urban centre and will be the largest change seen in the city for over a century. Likewise, the New Briggate High Street Heritage Action Zone is receiving central government funding to renew high street properties in the area, improving their facades and roofing.
Leeds is also home to a large student population. More than 200,000 people attend Leeds University and Leeds Metropolitan University, providing a large pool of loan-funded, guaranteed tenants for landlords. The city’s diverse economy also attracts young professionals looking for inexpensive properties to rent.
Leeds’ economic progress has been significant. The city council believes that the economy will grow by more than 21 per cent over the next ten years, with financial and business services accounting for more than 38 per cent of total output. Jobs are also booming, with 19,000 newly created in 2022 despite significant national and global economic headwinds.
Transport links are also being upgraded in ongoing efforts to deliver on “Northern Powerhouse” promises. In July, then UK transport secretary, Grant Shapps, unveiled the £11.5 billion Transpennine Route Upgrades scheme, which will improve Leeds’ rail network, both east-west and north-south, facilitating better connections to the Midlands and London. Leeds is also a recipient of the Leeds Public Transport Investment Programme, a long-running programme that will see the introduction of bus priority corridors, improvements to the city centre road layout, new park-and-ride schemes, and improvements to bus stops and related services.
How does Leeds compare to Liverpool and Manchester as a buy-to-let area?
The average property price in Leeds is £257,841, according to the latest data. That compares to £304,104 in Manchester and £219,029 in Liverpool. Leeds, therefore, sits in the middle of the pack in terms of major northern cities and is a suitable property investment choice for those with average budgets or those who want to serve the student market.
Average property rents in Leeds are £1,143 per month, for a standard two-bedroom property. That compares to £1,514 in Manchester and £1,126 in Liverpool.
Top 10 areas for buy-to-let in Leeds by rental yield
So where’s the best spot for property investment in Leeds? Using industry data on postcode performance, we’ve identified the 10 best areas for buy-to-let in Leeds based on rental yield. Here are the results:
| Postcode | Avg asking price | Avg asking rent (pm) | Avg yield |
|---|---|---|---|
| LS4 | £219,935 | £1,886 | 10.3% |
| LS2 | £160,054 | £1,231 | 9.2% |
| LS6 | £285,470 | £1,870 | 7.9% |
| LS9 | £149,165 | £933 | 7.5% |
| LS3 | £232,379 | £1,427 | 7.4% |
| LS1 | £195,382 | £1,128 | 6.9% |
| LS11 | £147,376 | £836 | 6.8% |
| LS10 | £189,990 | £1,006 | 6.4% |
| LS5 | £204,350 | £862 | 5.1% |
| LS14 | £221,681 | £931 | 5.0% |
1. LS4 – Burley, Kirkstall
LS4 is roughly 2 miles northwest of Leeds city centre and covers the suburb of Burley – a residential area primarily known for its terraced houses, mix of local amenities, and green spaces, such as Burley Park.
Burley has historically been popular among students attending the nearby University of Leeds and Leeds Beckett University due to its proximity to several campuses. As such, there’s a large portion of student accommodation, which tends to achieve excellent rental yields and helps to explain LS4’s position at the top of our table.
Apart from students, Burley also attracts young professionals who work in Leeds city centre. Its close proximity to the city centre, which is ideal for those wanting an easy commute, plus an exciting range of bars, cafes, and restaurants, make it a fun and desirable place to live.
2. LS2 – Blenheim, City Centre & Woodhouse
LS2 is an area of Leeds that encompasses the northern part of the city centre and Woodhouse. It is particularly popular among landlords because it contains the University of Leeds and Leeds General Infirmary, two major sources of tenants.
The area is actually quite a strange shape, running in a semicircle around Leeds city centre, following the major circular roads. Excellent access to shopping, places of work, gyms, and road transport make this area highly desirable, pushing up rents.
The housing stock in the area is exceptionally varied. Close to the university, you’ll find an abundance of Victorian properties, most of which are either owned by the university or rented to students. Close by is Blenheim. Here, you’ll find Victorian streets and terraces, with some newer post-war terrace builds mixed in. The most attractive properties surround Blenheim Park, a small patch of greenery with views over the city.
The closer you get to the city centre, the more opportunities there are to purchase flats. The area around Lovell Park Road offers a mix of high-quality apartment blocks and old high-rise units.
3. LS6 – Headingley and Hyde Park
LS6 mainly encompasses the Headingley and Hyde Park areas of town. Again, because this postcode covers a large area, property opportunities for buy-to-let investors are varied.
The Hyde Park area of town features rows of densely-packed terraces with access to the eponymous park and city centre. Further north in Headingley, things become distinctly more suburban with larger properties, front gardens, and detached homes.
Headingley has access to the city via Headingley Lane, which connects to Otley Road. It is also close to both the Burley Park and Headingley rail stations, great for commuters who need quick access to Leeds city centre or other northern cities.
The Hyde Park area of town is popular among workers and students. Headingley is more for middle-aged professionals, people in senior managerial or clerical positions, and their families.
Yields are high here mainly because of the growing economic vibrancy of Leeds’ urban core. Gentrification is in full swing.
4. LS9 – Burmantofts, Cross Green, East End Park, Gipton, Harehills, Mabgate, Halton Moor, Osmondthorpe and Richmond Hill
The LS9 area comprises Burmantofts, Cross Green, East End Park, Gipton, Harehills, Mabgate, Halton Moor, Osmondthorpe and Richmond Hill. Sitting to the east of the city centre, it is a large district, encompassing both urban and suburban landscapes.
The reason for LS9’s high yields mainly comes down to its excellent transport links and access to open spaces. This part of Leeds has multiple greens and parks, and it is also on the main intersection of the A64 from York, the A61 (M1), and the A58 that connects the west of the city.
Closer to the city centre in the East End Park area, you’ll find budget apartment accommodation, mostly built in the 1960s and 1970s. Moving further out to the Halton Moor area, there are traditional post-war semi-detached properties, with attractive front gardens. The Harehills area has classic terraced properties on gridiron streets. These tend to sell for bargain prices, helping landlords make excellent returns.
5. LS3 – City Centre Outskirts, leading to Burley & Woodhouse
LS3 is an area of Leeds to the immediate west of the city centre, the other side of the A58, a major route that runs to the north of the urban core. In between the centre and LS4’s Burley, and covering part of Woodhouse, this area offers some of the highest yields in the city.
Yields are high in this area mainly because of its proximity to the city centre, university and hospital. Landlords can find several different types of accommodation in the area. Apartments and flats dominate the main Burley Road. However, to the north, there is more traditional accommodation, including Georgian and Victorian terraces.
Yields are also high because of its local amenities. While the city centre is close by, nearby Burley also has some excellent schools, access to Oakwell Hall and Country Park, and interesting historical sites, such as the Royal Armouries, all of which make it a desirable place to live.
Because of the proximity to central Leeds, detached properties are rare. Landlords target this area because of low unit costs and its appeal among people looking to live as close to their work as possible. The average household income is £31,720, significantly lower than the city centre, pushing down rental prices and overall housing costs.
…And an honourable mention to LS1 – Leeds City Centre
Leeds postcode LS1 encompasses most of the city centre and its historical areas. Yields are high, thanks to the area’s prime location. It is close to places of work, transport links, entertainment, and universities.
LS1 has a population of around 330,000 people with an average household income of £62,920. Just under 1 in 4 people who live in the area have higher or intermediate managerial jobs, professional occupations, or administrative roles. Around half have mid-level white collar or skilled manual labour roles, and 25 per cent are semi-skilled or unskilled, working in the lowest grade occupations, or unemployed. Because of this diversity, the area attracts a mixture of landlords, ranging from those looking for cheap flats to luxurious penthouses.
High yields are also being driven by the fact that LS1 is one of the trendiest places to live in Yorkshire. Leeds city centre offers a mixture of hip bars serving local ales, boutique stores, and quirky cafés. The Belgrave Music Hall and Canteen, Headrow House and The Tetley, a contemporary art gallery, are all within walking distance.
Most properties in Leeds city centre are apartments, flats, studios or maisonettes. While there are some terraced and semi-detached homes, they are rare. Because of a recent surge of building work, a large number of small dwellings are for sale in the area. Landlords typically purchase homes of multiple occupation (HMOs) and rent out units to tenants.
Despite heavy urbanisation, LS1 is close to several parks and gardens, including Merrion Street Gardens, St John’s Park, and Park Square. Benches, flowers, paths for dog walking and green picnic spaces are available.
Summary
Leeds has tremendous potential for buy-to-let landlords. The city is brimming with students and young professionals, all seeking rented properties. And, compared to many other regional hubs, it is doing well economically, projected to grow significantly over the next decade by the council. If regeneration efforts are successful (and they have been so far), more people will move to the area, boosting rents, property prices and yields further.
About this data
The data in this article is an accurate representation of the Leeds property market as of June 2023. We’ll update this report next year, in 2024, with fresh data.
