Devolution dividend: National support for regional growth
The November 2025 Government Budget is amongst the most significant in a decade, and it is impossible to ignore its support for regional growth. For Leeds in particular, this Budget signalled a potential multi-decade commitment to development. Positive announcements were underpinned by the establishment of the Leeds City Fund, recommitment to West Yorkshire Mass Transit, support for the Northern Growth Corridor and Northern Square Mile, and recognition of Leeds’s South Bank as a promising site for a New Town.
These measures are strategically aimed at catalysing growth in Leeds by creating a more predictable environment for inward investment and development, particularly following the West Yorkshire Devolution Deal. Infrastructure is a key pillar and the funding streams reflect that, as set out in this theme.
Leeds’s challenge will lie in effectively capitalising on these opportunities to build sustained investor and developer confidence across the city, particularly amidst persistent global macroeconomic instability.
Public sector partnerships: A vision for growth
The public sector played a key role in unlocking residential development across the city in 2025. The successful delivery of strategic regeneration projects, particularly those on brownfield sites, often hinges on innovative funding mechanisms and robust public-private partnerships to overcome inherent development complexities and costs.
Additionally, the clear and stable policy environment in the city, underpinned by Leeds City Council's Local Plan, provides predictability essential for fostering investor confidence, mitigating risks, and enabling innovative public-private partnerships for successful project delivery.
In this context the "super-charged" relationship between Homes England and relevant government departments is a key enabler in de-risking such developments. A prime example is the £100 million housing scheme on Kirkstall Road. This five-acre brownfield site, a mile from the city centre, will deliver 618 apartments across five buildings, alongside new landscaped public spaces by the River Aire. This joint venture with Glenbrook is financed through a £91 million loan from Homes England and Greater Manchester and West Yorkshire Pension Funds, complemented by a £5.7 million grant from the West Yorkshire Combined Authority's brownfield housing fund.
This multi-faceted funding model underscores the collaborative effort to unlock brownfield land, contributing to both national housing targets and Leeds’s long term plan ambition for 50,000 new homes, including an initial 8,000 in the city centre.
Additionally, WYCA is working in partnership with Latimer, the development arm of Clarion Housing Group, to deliver over 400 homes through Phase 1 of the Dyecoats development, also located on Kirkstall Road. The Guinness Partnership’s Points Cross development also received £5.75 million in funding from WYCA’s Brownfield Housing Fund to revitalise the city centre brownfield site to deliver high-quality affordable housing and support carbon-neutral goals.
Saxton Lane, which completed in 2025, also received £1.275 million from the fund, enabling the delivery of 204 affordable rented homes in Leeds, helping support Leeds City Council’s ambition to deliver over 1,000 new affordable homes annually.
These public sector supported developments are creating tangible benefits for local communities. By delivering high-quality, affordable housing and improving connectivity, they provide a stable foundation for residents, making it easier to access jobs, education, and essential services, fostering greater social mobility across the city.
Historically, the Leeds Crane Survey has identified the South Bank as an emerging neighbourhood, acknowledging its potential as a regeneration catalyst and a growing employment destination on the city's periphery. However, through a period of sustained and impressive delivery, bolstered by Leeds City Council’s commitment to a holistic masterplanning approach, the South Bank has undergone a significant transformation, establishing itself as a vibrant focal point of development within Leeds.
There are currently 6 schemes under construction in the area, comprising over 2,000 homes and 235,000 sq. ft. of office space. Mixed-use regeneration projects such as Vastint’s Aire Park continue to demonstrate the South Bank’s capacity for large-scale transformation. Once complete, the Aire Park scheme will provide 800,000 sq. ft. of office space, 1,350 homes, 54,000 sq. ft. of retail space and the largest new city-centre park in the UK, spanning 8 acres.
The South Bank also has a strong pipeline of larger homes on the horizon, making this area increasingly attractive to families – 960 of the proposed 1,925 homes at Caddick’s South Village development will be two and three bed homes. This sustained activity is already transforming the urban fabric, which is set to be further enhanced by an ambitious vision supported by the Government’s ‘New Towns’ initiative.
The New Towns Taskforce Final Report, published in late 2025, emphasises the importance of integrated infrastructure, placemaking, economic growth, sustainability, and community identity across the potential locations, and explicitly identifies Leeds’s South Bank as one of 12 preferred locations for a New Town. Development of the ‘New Town’ would further unlock substantial investment and development potential in the South Bank, to create a vibrant, self-sufficient urban quarter suitable for both families and young professionals, building on the existing diversity of the South Bank offering.
The decision on which New Towns to progress first is anticipated in Spring 2026. If these plans materialise, they could see some 13,000 homes built in the Southbank area, with a target of 20 per cent affordable and a further 20 per cent being social rent to further improve inclusion and social mobility across Leeds. The area would be bookended by cultural anchors – the Royal Armouries Museum to the east and the historic Temple Works, potential future home of the British Library North, on its western side – to integrate the established identity of the city.
National support: A catalyst for Leeds’s economic development
The city’s strengths are anchored by its core sectors – financial services, technology, and health – which underpin a landscape of innovation-led growth and enterprise. Leeds has seen the biggest job growth in knowledge-intensive businesses of all UK cities since 2010, which supports over 3,000 digital and data businesses across the city, and over 18,000 business, financial, and professional services (‘BFPS’) firms across the wider region.
The Government's decision to locate the National Housing Bank's headquarters in the city reflects the city’s strong credentials in finance. The Bank will add to the city’s existing cluster of key financial institutions, including the National Wealth Fund, the Bank of England, and the Financial Conduct Authority, consolidating the headquarters of major national financial institutions within the city limits.
The UK Infrastructure Bank (UKIB) has also announced a strategic shift to expand their mandate beyond just infrastructure, to encompass a broader range of sectors where private investment is lacking – including green hydrogen, carbon capture, ports, gigafactories, and green steel. The newly named National Wealth Fund (NWF) will continue to be located within the city centre’s ‘Northern Square Mile’. Leeds will be able to capitalise on the NWF's broader financial power and national recognition to boost its standing as a leader in sustainable finance and innovation.
The Northern Square Mile is an ambitious growth area focused on cementing Leeds’s position as a national hub for Finance and Professional Services. It aims to create 50,000 new jobs within this sector to promote this area as the second most significant global financial centre after the City of London. This initiative focuses on the area around Leeds Station, which hosts the city’s key anchor institutions, leveraging its potential to catalyse further development and strengthen the city's financial and professional services offering.
Northern Square Mile and Leeds Innovation Arc Location
(Credit: Economic Vision: The future of Finance and Professional Services - Leeds City Council, 2025)
Added to public sector investment, Leeds continues to build its reputation as a nationally recognised engine for innovation and opportunity and is home to the highest number of UK-headquartered corporates outside London.
Whilst Leeds is showing economic strength, as these knowledge-intensive sectors continue to draw both businesses and talent to Leeds, there is a further opportunity to establish itself as a top choice for overseas financial investors. Currently, only 7.5 per cent of Leeds-based financial services firms have foreign parent companies.
Indeed, a recent Investment Attractiveness report (by Irwin Mitchell in partnership with the Centre for Economics and Business Research (CEBR)), assesses 48 UK cities based on economic growth, skills, and infrastructure, and highlighted Leeds’s strong performance. The city maintained its top-ten position, securing eighth place nationally for global investment appeal, a ranking significantly bolstered by its promising economic growth outlook. To convert this appeal into tangible economic growth, Leeds should look to capitalise on the support for regional growth outlined in the November 2025 Budget and the recently announced ‘Leeds Reforms’, to boost its appeal for Foreign Direct Investment (FDI).
The ‘Leeds Reforms’, announced in July 2025, seek to create a growth-first regulatory environment to support the Government’s ambition to make the UK the world’s leading destination for financial services by 2035. Financial services is already the UK’s most profitable sector, earning nearly double the returns of the next most lucrative sector. Given Leeds’s reputation as an established financial sector powerhouse, the city is well positioned to benefit from these reforms, which will assist in enhancing competitiveness and investment across the UK by cutting financial red tape that has historically slowed growth.
Government support for regional growth is also crucial for delivering local strategies, like the West Yorkshire Combined Authority’s (WYCA) BFPS Cluster Action Plan and Leeds City Council’s Economic Vision. National backing will be instrumental in ensuring WYCA can create 50,000 new BFPS jobs and double growth in the BFPS and fintech sectors over the next decade, while also driving inward investment and business relocation to the ‘Northern Square Mile’ as the city aims to attract more global anchor institutions.
To facilitate the arrival of more anchor institutions, the city is priming its 'Northern Square Mile' with Grade-A office developments. In the South Bank, Vastint’s Aire Park continues construction, with the Kellstone (Plot MU4) building due to bring over 75,000 sq. ft of Grade-A office floorspace to market in 2026. The building is already two thirds pre-let, with Eversheds Sutherland set to relocate its 600+ strong team to the building in early 2027.
Furthermore, the City Core pipeline alone boasts over 650,000 sq. ft of office space with planning permission, spearheaded by Town Centre Securities and Glenbrooks’ Whitehall Riverside development, and the redevelopment of Wellington Plaza.
Infrastructure and connectivity: Unlocking potential
Limited connectivity to the city centre has historically constrained Leeds’s economic potential, with only 38 per cent of its population currently able to reach the centre by public transport within 30 minutes. With the Office for National Statistics (ONS) projecting a population increase of 53,000 by 2043, significant infrastructure interventions are vital in ensuring this population growth translates into increased economic prosperity through improved access to jobs, education, training, and leisure opportunities across the region.
Nationally, the Government’s November 2025 Budget outlines a series of commitments that aim to accelerate regeneration, infrastructure development and housing delivery across Leeds, including support for the Northern Growth Corridor (encompassing Leeds, South Yorkshire, Liverpool and Greater Manchester), continued financial investments through the Transport for City Regions Fund and the Local Innovation Partnership Fund, and the establishment of the Leeds City Fund.
The establishment of the Leeds City Fund will allow Leeds City Council to retain 100 per cent of business rates growth above an agreed baseline for a period of 25 years. This direct, long-term, and flexible funding stream is specifically intended to support critical transport enhancements, facilitate new homes and commercial developments, skills development, and invest in the city’s public spaces. For investors and businesses, the Leeds City Fund signals a long-term commitment to urban regeneration and economic growth, providing certainty and stability needed to encourage the delivery of more ambitious private sector projects across the city.
The Devolution Deal is also now anticipating the region's first Integrated Settlement in April 2026. This marks a significant step in the region’s devolution efforts and will be integral to the delivery of key infrastructure and connectivity improvements. The Integrated Settlement will provide greater certainty and flexibility around key transport, skills, and housing priorities, through a £1.9 billion funding package which will enable a joined-up approach to deliver the region’s ambitious Local Growth Plan.
2025 has seen progression on significant transport infrastructure schemes, with the £46 million Sustainable Travel Gateway scheme at Leeds Station, funded via the Transport for City Regions Fund, expected to complete in early 2026. The project, which forms phase 1 of the Leeds Integrated Station Masterplan, will transform the Station into more user-friendly and accessible environment which can accommodate growing rail passenger numbers to futureproof connectivity to the city.
More widely, the £11 billion TransPennine Route Upgrade (TRU) continues at pace, upgrading the existing main line for 70 miles between York and Manchester to provide an electric network and increased capacity. These works will provide a foundation for the Northern Powerhouse Rail scheme, which will see £45 billion of upgrades following recent Government commitments to rail networks across the north. This significant package of works will include a combination of upgraded and new lines and station improvements, and is expected to significantly enhance the commuting access of residents within Leeds businesses by 23 per cent, opening up greater opportunity for work, skills and investment.
Leeds has long been the largest city in Western Europe without a modern Mass Transit System, historically constraining key growth corridors and restricting the job mobility. As part of a strategic recalibration, work on the long awaiting West Yorkshire Mass Transit scheme is now targeting full completion and the start of passenger services in the late 2030s. However, despite recent news of delay, commencement of construction is still anticipated for 2028, within £2.1 billion in local transport funding still promised to West Yorkshire.
Commencement of the Mass Transit scheme will mark a pivotal moment for urban connectivity and sustainable development in Leeds, with initial phases expected to boost connectivity and accessibility between Leeds city centre and its peripheral communities like Holbeck and Mabgate. This increased connectivity will also assist in facilitating the long-term integration of key economic anchor projects such as the Elland Road Stadium Expansion, which has the potential to unlock significant development opportunities through the creation of a new neighbourhood in South Leeds, leveraging the connection between the stadium and the city centre.
The Mass Transit System will form part of the wider ‘Weaver Network’ – a fully integrated transport network for the West Yorkshire region. As part of this integrated transport network, work is also underway to introduce a fully-franchised, publicly-run bus service between April 2027 and October 2028, which will apply to services running solely in West Yorkshire.
Overall, plans for new and improved connectivity, driven by the forthcoming large-scale infrastructure interventions across Leeds and the wider region will assist in better connecting people to homes, jobs and education, promoting investment and improving the competitiveness of the city.
Looking ahead, the sustained investment in transport and connectivity, particularly through the West Yorkshire Devolution, is crucial. This will enable a holistic strategy for infrastructure development, ensuring Leeds leverages its newfound financial autonomy, such as the Leeds City Fund, to attract further investment and stimulate economic expansion. This integrated approach will be vital in delivering the residential critical mass needed for a growing population, with over 4,000 homes already planned for the South Bank, and the potential for a further 13,000 under the 'New Towns' initiative, solidifying Leeds's position as a dynamic and inclusive regional hub.
