Controversial plans to expand the boundaries of Leicester could have an impact in many areas. The implications for the lettings market may be substantial, whether you plan to sell up, carry on letting a property or invest.
The plans were published by the government in July and proposed to significantly expand the boundaries of Leicester, along with those of several other cities, including Nottingham and Lincoln.
Plans for Leicester include:
- Incorporating the whole of the borough of Oadby & Wigston
- Absorbing large parts of the boroughs of Blaby, Charnwood and Harborough.
- The change would increase the city’s population from its current 372,000 to 623,000.
- Provided the plan goes ahead, the new boundaries will come into force from April 2028.
Will The Expansion Plans For Leicester Definitely Go Ahead?
The city council backed the move, with mayor Sir Peter Soulsby stating that this would enable the construction of 30,000 much-needed new homes by 2046, but opposition parties and Labour councillors in neighbouring authorities are unhappy with the proposal.
Among the latest developments has been a vote by Charnwood Council to oppose the expansion, while Leicestershire County Council is exploring legal action in a bid to halt the government plans. They accuse Leicester of a “land grab”.
Therefore, it is not certain the plan will go ahead, but if it does, what are the implications for landlords?
Firstly, letting agents in Leicester will be dealing with a different situation when considering property in the city, for several reasons:
- Comparisons of the average rental cost or property price will need to be revised, as past comparisons will be a case of comparing apples with oranges.
- An expanded city means a larger number of rental homes
- If the expansion does result in more house building, this could impact availability and demand
- An enlarged city may prompt more infrastructure development, such as an expanded transport network, creating hotspots of popular places near stations.
What Will An Expanded Leicester Do To Rental Prices?
The average rent figure is sure to be distorted. The latest data from the Office for National Statistics for private rental prices indicated that the average price in Leicester was £1,024 a month. By comparison:
- Oadby & Wigston was very similar at £1,025
- Blaby was £994
- Harborough was £963
- Charnwood was £958
This suggests the average rent for the city will drop automatically in April 2028, a misleading statistic that might confuse some renters and landlords.
The key, therefore, will be to check closely with letting agents what the going rate is for each district, to understand the true picture and how much it has really changed over time.
Will Expanding Leicester Mean A Lot More Homes Being Built?
Plans to build more homes in the expanded area may be unpopular, but none of the land set to be absorbed into Leicester is classed as green belt, unlike the Nottingham proposals.
This fact could facilitate substantial new housebuilding, which should affect demand for rental property as there could be more supply and thus lower prices for more aspiring buyers, making it easier to move from renting to ownership.
However, because the boundary expansion is so controversial, landlords should not expect this to happen very quickly, as local opposition to new developments may be fierce. It may be an issue for the future, but not the short term.
Therefore, landlords would be wise to focus mostly on rent prices in the short term and leave other issues for the years ahead.
