Despite fragile consumer confidence, caused by an uncertain political and economic climate, activity in Yorkshire’s housing market has remained strong in the last 12 months, according to Savills.
This was the message from local and national property experts, who presented analysis of the market to around 50 local buyers and sellers at an event at The Hospitium in York.
Savills residential research analyst, Faisal Choudhry, is a leading commentator on the UK housing market. Speaking in York where Savills Yorkshire’s office is located, he said that weaker sentiment since the referendum and more recently, the election, had caused a “ripple of caution”, resulting in annual house price growth across Yorkshire slowing since before the referendum but remaining more optimistic than other parts of the UK.
Faisal said: “House price growth in Yorkshire as a whole reached 2.2 per cent in the year to September 2019 compared to six per cent in June 2016. However, this is still relatively high when compared with the UK average which was just 1.3 per cent in September 2019 compared to 8.2 per cent before the referendum.
“Certain hotspots across the county continue to perform well against the county average with Ryedale seeing annual house price growth of four per cent in the year to September 2019 and 14 per cent since the EU Referendum in June 2016.
York follows closely with annual growth of three per cent and 12 per cent since the referendum, whilst Harrogate also saw an increase in growth of one per cent in the period to September 2019, alongside growth of nine per cent since June 2016.
“UK wide transactions have also taken a hit since the referendum, with an eight per cent drop, from just under 1.3 million three years ago to just under 1.2 million over the last year. While first time buyers have benefitted from an assortment of Government led housing schemes, home movers have had much less help.
Mortgaged buy to let investors have been hit the hardest as they’ve had a triple hit of additional stamp duty since April 2016, restricted tax relief on their interest payments and increased mortgage regulation. Cash buyers, including downsizers, continue to make up around a third of the market but due to the more discretionary nature of this buyer type, many have been waiting until some uncertainty has cleared before committing to a purchase.”
The York market continues to experience interest from both family buyers looking to upsize and downsizers looking for smaller, more manageable homes for retirement. Savills York reports that 39 per cent of their buyers in 2019 were looking to increase the size of their home, whilst 24 per cent were purchasing a smaller property over the same period.
Tanya Coffey, associate director in the residential sales team at Savills Yorkshire, said: “Against a backdrop of political uncertainty we expected to see a dip in the market this year, but the demand for property has been good with a notable increase in interest from buyers outside York. This is testament to the popularity of the area.
“A hotspot for buyers, York represents the best of both worlds; its educational, cultural, connectivity and employment opportunities are among the best in the UK, while it still represents value for money.”
The research also highlighted that transactions above £400,000 in York have fallen from 412 in the period between October 2017 to September 2018, to 372 between October 2018 and September 2019, but this was mainly due to a lack of supply, with large discrepancies in different parts of the city.
Faisal added: “An increase in the YO10, YO24 and YO31 postcodes around the centre of York was offset by larger falls in YO1 in the centre and also YO23, YO30 and YO32 in the outskirts. This was largely due to the completion of a major new build development in YO1, sold by Savills, that had boosted transactional activity in 2018.”
Savills also reported that those looking to buy properties at £1m+ within York were up 12 per cent this year.
Ben Pridden, head of residential sales at Savills in Yorkshire, said: “People have become bored of waiting for the political dust to settle and as such, they are on the hunt for their next move. There is still a needs based market out there and there is activity in and out of town.
“Sellers should put trust in their agent and let them use their knowledge and experience of the market to provide a sensible valuation and monitor the changing market conditions on their behalf. Sensible pricing is paramount to success, and we have seen time and again over the course of this year that quality property at the right price stands to generate positive attention, and often multiple bids.”
Looking ahead, Faisal Choudhry, gave his predictions on how recent political and economic decisions could shape the housing market . He said: “We have seen a number of agreed deals that have been put on hold pending the outcome of the general election.
“Last week’s result should unlock some of these deals and mean prospective buyers are more committed, bringing a greater sense of urgency to the market. However there is a possibility that it will also harden some sellers’ price expectations.
“The election of a Conservative majority government is in line with the assumptions which we made when we prepared our house price forecasts back in November, in which Yorkshire is expected to see the second highest growth in the UK at 21.6 per cent over the next five years, compared to a national average of 15.3 per cent and four per cent in London.
“The forecasts suggest only modest price growth in 2020 on the basis that, despite domestic political uncertainty receding, some economic uncertainty will remain until a trade deal is agreed with the EU; even if, as is widely expected, the UK leaves the EU by the end of January without a further extension of article 50.
“This could mean a bounce in demand in the first part of 2020 proves difficult to sustain through the summer months and into autumn market.”