How to buy in Leeds without seeing the property
by on 6th June 2018
Leeds, like many major cities, is undergoing transformation of its property market, which is largely being driven by the digital explosion. The days of consumers spending hours browsing in shops may be coming to an end as we have all access to high speed broadband and the likes of Amazon, eBay and Gumtree.
Giant commercial spaces left by the closures of companies like BHS, Toys R U and Maplins, as well as the retail slimming down of companies like Marks and Spencer, as well as Homebase means that there is going to be a great deal of brownfield development in Leeds and elsewhere. Imagine for a moment that IKEA went into administration, we’d have giant blue and yellow buildings, with ample parking, ready made micro apartments and meatballs on tap, close to the M62 and major West Yorkshire conurbations.
That’s why many investors are keen to buy “off plan” of new or converted buildings in former commercial areas.
There’s compelling reasons too:
Cheaper financial deals.
Let’s look at each point in more depth with input from the Stephen, the company director of the Hogan’s team:
“Prices are often attractive on off plan developments” says Stephen Thorpe “because developers are keen to raise collateral early on so that the building can progress. We hear stories of investors being offered micro-apartments in other city centres at deals of £40,000 per unit (not in Leeds city centre though where land is at a premium). You can then recoup this and more in a year or two by selling on for capital profit. Those 5 units you paid £40,000 each for could be worth £60,000 in 2020, netting you a profit of £100k in just two years.”
“The second and third points go hand-in-hand: mortgage lenders often offer more generous terms on off plan finance and often with smaller deposits.”
You do though need to invest with your homework head on – ie, do your research. A commercial off plan redevelopment may look financially attractive at first but you do need to assess location, closeness to transport links, and the profile of your tenants.
Would your target letting market find their future location a good one or will your investment remain empty?
There’s an old saying that there’s nothing safer than bricks and mortar and to some extent that’s true. But as with buying traditional property, you do need to proceed with caution on off plan developments.
If you’d like any more advice on off plan investments, buying or selling property in Leeds and across West Yorkshire, contact one of our expert team today.