Property Market, Investing
Leicester’s economy is worth roughly £24.5bn, the largest in the East Midlands region and one of the fastest growing areas in the UK.
The local council intends to promote economic growth and increase the local economy’s value to £30bn per year by 2030 with an additional 30,000 jobs. Furthermore, the council has recently approved strategic growth plans for further investment to focus on housing, the local economy, and infrastructure, with long term objectives spanning up until 2050.
According to Barclays’ SME Growth Factors Index and PWC, Leicester is also considered one of the best cities to live and work within the UK as it is a consistent top performer across a range of measures including new businesses, jobs, income, skills and health. Not only is it the best place in the country for tech start-ups and the second-best place in the UK to start a business, but it is also home to some of the nation’s biggest employers, such as:
• Walkers Crisps
Strong economic growth
The city’s economy, growth plans and vibrant culture make Leicester one of the top ten cities to live and work within the UK, attracting young professionals from around the country.
With regards to housing, there is currently a significant imbalance between supply and demand which has created a competitive market. According to Hometrack, Leicester has experienced some of the strongest growth in year-on-year property prices, with the latest figures suggesting that the average house price has increased by £51k between 2017 and 2021. Renting is therefore a highly attractive alternative within the city.
Booming student accommodation market
Leicester is home to two major universities – the University of Leicester and De Montfort University.
The University of Leicester is ranked in the top 25 universities in the Times Higher Education REF Research Power rankings. De Montfort University has recently benefited from over £136m of investment into campus facilities. It is one of the ten most popular universities for national and EU students.
According to Homes England Student Accommodation data, there were 38,520 full time students studying in Leicester, with 14,635 students studying at the University of Leicester and 23,895 at De Montfort University in 2021.
Data also shows that there are approximately 33,900 beds available across Purpose Built Student Accommodation (“PBSA”), university accommodation and the private HMO market, and based upon current demand, there is a deficit of 12%. However, there is also a growing demand from students, which is likely to sustain, and potentially exacerbate the deficit as StuRents estimate that approximately 13,500 more beds are required in the city to meet the estimated demand from students over the next few years.
Given that much of the current stock is spread across private HMO’s, there is a strong opportunity to provide further PBSA beds and increase the quality of housing that students are demanding. A mere 20,000 beds come from purpose-built accommodation and with tightening regulation around private HMOs, demand for purpose-built accommodation is likely to increase significantly.
Shojin will be launching exciting Private Rental Sector and Purpose-Built Student Accommodation investment opportunities in Leicester soon.
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