House Hunting in Leeds - Initial Conclusions from the Summer of 2009

Introduction

The letting season still has about two weeks of activity to go and the Unipol web site is still very active with an average of about 1,100 searches a day taking place it is useful to try and conclude what activity there has been.

This has been a tough letting year for property suppliers with a significant surplus in the market, both in off street properties and larger developments.

SUMMARY KEY POINTS

• Between January and June 2009 71% of properties were let compared with 77% in 2008. More returning students will be renting properties in September for 2009-2010
  
  
• Letting Activity in July and August was low at 800+ bed spaces but was consistent across both 2009 and 2008
  
  
• Because of new developments coming on line there are 900+ room still available in larger complexes
  
  
• There will be demand for a further 800 rooms over the next 2 weeks
  
  
• There are currently 2,008 rooms available on the Unipol web site.
  
  
• At the end of the house hunting season there will be 3,960 bed spaces surplus in the market (700 more than in 2008)
  
  
• Hyde Park continues to increase in popularity with students
  
  
• There has been an increase in the percentage of unlet beds in Headingley from 23% to 27% and although this does not seem dramatic this is the largest concentration of bed spaces in Leeds and there will be a significant increase in the number of empty houses (particularly shared houses for 6 where the surplus is greatest) in Headingely across 2009-2010.

Further Information

Letting Activity March to June 2009

Between January and June 2009 71% (8,300 bed spaces) of properties displayed on the Unipol system were let, a slightly lower letting rate than the 77% (8,228 bed spaces) the previous year but with 2009 seeing a 10.5% rise in advertised bed spaces. It can be concluded that a few more students were moving away from 52 week lets and that the service will see greater levels of activity from returning students in mid September (as the search levels and footfall in the Bureau already confirms)

An additional 1,767 bed spaces were displayed in larger developments.

86% of properties let between March and June 2009 were covered by the Unipol Code.

Accredited and well marketed properties (with good photographs being provided with the property details) were let easiest at the beginning of the year (across January, February and March) and better quality providers had as good a returning student letting year in 2009 as in 2008.

Hyde Park was the most popular area at the beginning of the lettings cycle and Headingley has lost some popularity and lets later in the season.

Letting Activity in July and August

In July 2009 316 bed spaces were let (compared with 489 bed spaces in 2008). August lettings have been consistent with 2008, where we have seen 498 bed spaces let in 2009 compared with 491 in 2008.

Letting Activity in September

Lettings are not expected to increase to the same degree as was seen in September 2008. All the large developments were full by this time in 2008 and in 2009 there are at least 860 vacant bed spaces available in complexes. Most of the September house hunters will be continuing students returning in September, international students and postgraduates. There is some evidence that the new visa system is slowing down the arrival of international students.

It is anticipated that there will be demand for a further 800 rooms over the next 3 weeks.

Property Surplus

There is still significant surplus in the student accommodation market and Unipol estimates that there are at least 3,960 bed spaces in surplus, about 700 bed spaces more than in 2008.

Looking at the current 2009 figures of the unlet beds spaces in certain areas compared with what was advertised (all figures as of 28th August 2008 and 2009):

12% are in Hyde Park (compared with 24% in 2008)
23% are in Woodhouse (compared with 36% in 2008)
27% are in Headingley (compared with 23% in 2008)
15% are in Meanwood (compared with 40% in 2008)

In Meanwood - roughly referred to as "Far Headingley" by students - the market continues to contract. Although the figure has improved on that seen in 2008, this is because of a drop in properties advertised by 50% in the area.

It is very clear that Hyde Park remains the first area of choice for students in January, February and March, particularly returning students in smaller groups. Headingley continues to prove more challenging and Woodhouse has seen somewhat of a recovery, this is with a backdrop of an increase of properties advertised in this area. Its proximity to Hyde Park may have helped.

Rent Levels

Rent levels are complex and the annual graph showing real rent comparisons from the larger developments remains the best way of looking at those rents. Overall, rents have increased by about 7%-8% from 2009-2009 to 2009-2010 in complexes, although 2010-2011 may see some suppliers who have been left with empty rooms begin discounting those rooms.

The off street property rents have held steady with a rental increase of about 2% at present. The current average rent for an off street Unipol Code house is £61.96.