Leeds doubles down on resi and regen as crane numbers stabilise
The city recorded its lowest level of new construction starts in more than a decade in 2025, but the latest Crane Survey from Deloitte shows overall development output rising, driven by a surge in residential and student accommodation.
The 2026 survey identifies eight new projects starting on site, down from 11 in 2024 and below the city’s average of 14, yet reveals a significant increase in development volume.
A total of 2,064 new homes and 896 student bedspaces commenced during the year, compared with 1,832 homes and 487 student beds in the previous survey – a year-on-year increase of 12% and 84% respectively.
In contrast, just 25,200 sq ft of office space broke ground – a 49% yr-on-yr fall – underlining a sharp divergence between residential-led growth and a subdued commercial market.
In total, 20 schemes are currently under construction across Leeds, delivering more than 5,900 homes, 1,400 student beds, and in excess of 250,000 sq ft of office space – the highest level of residential construction ever recorded by the survey, which is now in its 19th year.
A tale of two markets
The survey highlights a clear divergence between sectors. Seven of the eight new starts in 2025 were residential or PBSA schemes, reinforcing the city’s strength as a destination for city-centre living and graduate retention.
Completions data also remains strong. Almost 1,900 student bedspaces were delivered in 2025 – the third highest annual total since the survey began – reflecting continued demand from Leeds’ five universities and a student population exceeding 80,000.
Office development, however, has recalibrated in response to hybrid working patterns, rising build costs and a tighter funding environment. While new-build starts are limited, investor interest remains focused on grade A space and refurbishment opportunities, with average prime rents rising to £46 per sq ft – an 18% increase yr-on-yr – and grade A vacancy holding steady at around 2%.
This shift is already reshaping contractor pipelines, with retrofit and refurbishment emerging as a dominant theme for 2026.
More than 40% of city core projects now involve reuse or repurposing of existing buildings, aligning with both occupier demand and embodied carbon targets.
South Bank cements its role as Leeds’ growth engine
Locationally, the South Bank continues to dominate construction activity, accounting for 30% of all schemes currently on site.
Six live developments in the area will deliver more than 2,000 homes and 235,000 sq ft of office space, underlining its evolution from an ’emerging neighbourhood’ into a core development zone.
Major mixed-use schemes such as Vastint’s Aire Park exemplify the scale of ambition. Once complete, the project will deliver 800,000 sq ft of offices, 1,350 homes, 54,000 sq ft of retail and an eight-acre city-centre park – the largest of its kind in the UK.
Family housing is also moving up the agenda. At Caddick’s South Village, almost half of the proposed 1,925 homes will be two- and three-bed units, broadening the residential mix and supporting longer-term population growth.
Further momentum could come from national policy. The government’s New Towns Taskforce has identified Leeds South Bank as one of 12 preferred locations, with the potential to unlock up to 13,000 new homes if progressed.
A decision on initial delivery locations is expected in spring 2026.
Public sector funding unlocks brownfield delivery
A defining feature of Leeds’ current construction market is the scale of public sector intervention helping schemes get out of the ground.
Developers are increasingly relying on blended funding models and public-private partnerships to overcome viability challenges on complex brownfield sites.
Homes England, the West Yorkshire Combined Authority, and local pension funds have played a pivotal role: A standout example is Glenbrook’s £100m Kirkstall Road scheme, delivering 618 apartments across five buildings on a five-acre brownfield site.
The project is backed by a £91m loan from Homes England and regional pension funds, alongside a £5.7m WYCA brownfield grant.
Elsewhere, WYCA-backed developments include Latimer’s Dyecoats scheme, Guinness Partnership’s Points Cross affordable housing project, and the recently completed Saxton Lane development, which delivered 204 affordable rented homes.
Infrastructure and national institutions
The November 2025 Budget marked a turning point for regional development, with Leeds emerging as a key beneficiary. Commitments to West Yorkshire Mass Transit, the TransPennine Route Upgrade, the Leeds City Fund and the recognition of South Bank as a new town candidate have created a more predictable investment environment.
Leeds’ position has been further strengthened by the relocation or expansion of national institutions, including the National Housing Bank headquarters and the rebranded National Wealth Fund, reinforcing the city’s role as a financial and professional services hub.
This concentration of institutions is feeding through into demand for specialist commercial space, education facilities and innovation-led developments – particularly in digital, AI, and health technology.
A “new normal”
The survey concludes that the challenges of 2025 – from geopolitical instability and fluctuating tariffs to labour shortages and rising costs – are no longer temporary shocks but part of a “new normal” for the industry.
For Leeds, resilience lies in its adaptability. The report notes that contractors and developers able to pivot toward residential delivery, retrofit-led office schemes, infrastructure-enabled regeneration and publicly funded partnerships are best placed to benefit as confidence improves.
With interest rates easing, government support intensifying, and more than a third of developers indicating they are more likely to start projects in 2026 than in 2025, the foundations are being laid for the next phase of growth.
Nolan Tucker, infrastructure and real estate director at Deloitte, commented: “There is resilience in Leeds’s residential and student accommodation sectors, where development remains strong amidst a broader recalibration in the city’s construction landscape.
“This sustained momentum underscores Leeds’s attractiveness for city centre living, and its status as student-friendly city.
“Our latest survey has highlighted the important role the public sector played in unlocking residential schemes and strategic regeneration projects.
“The challenge now for Leeds is to build sustained investor and developer confidence across the city.”
Angela Barnicle, director of city development, Leeds City Council, commented: “The survey reinforces our belief that against a backdrop of global uncertainty and economic challenges, Leeds has positioned itself for a new era of growth, with a renewed commitment to regional development.
“We’re encouraged by the sustained momentum in our residential and student accommodation sectors, which are crucial to supporting our growing population and vibrant student community.”
