Sell­ers need to get real as an­other year of uncer­tainty looms ahead

What does 2012 have in store for the prop­erty mar­ket in York­shire? Sharon Dale asked the ex­perts for their pre­dic­tions.

Yorkshire Post - Property - - PROPERTY -

Ste­wart Charnock-bates of Charnock Bates es­tate agency, Halifax: LAST year was the worst we have had for three or four years but I be­lieve that the mar­ket will pick up in terms of ac­tiv­ity.

I don’t think prices will rise this year but I think they will in 2013 thanks to sup­ply and de­mand. The pop­u­la­tion is grow­ing and very few houses have been built over the last few years.

We feel very pos­i­tive about that the mar­ket and that con­fi­dence is re­flected in our de­ci­sion to open a new of­fice in Rip­pon­den. We have seen an in­creas­ing num­ber of en­quiries from peo­ple re­lo­cat­ing to the BBC’S new Me­dia City in Sal­ford, which is just a 30 or 40 minute drive from that part of Calderdale. An­drew Win­ter of Blun­dells es­tate agency in Sh­effield:

of auc­tion­eers and valuers, All­sop: IT will be an­other tough year for the hous­ing mar­ket in York­shire. As ever, re­al­is­tic pric­ing will be key and poorly lo­cated or sub­stan­dard prop­er­ties will come off worse. We are en­cour­aged to see that the buoy­ant rental mar­ket is stim­u­lat­ing more buyto-let pur­chases, so prop­er­ties sit­u­ated in pop­u­lar rental ar­eas, in­clud­ing city cen­tres, do find buy­ers and will con­tinue to do so in 2012. In­vestors have few safe places for cash, so prop­er­ties re­turn­ing eight per cent or more now look very at­trac­tive and there are plenty around.

The mar­ket for high value £1mplus houses will strug­gle more as peo­ple pre­serve cash and banks take fewer lend­ing risks. Vol­umes are down in this sec­tor. Once again it is qual­ity that counts and own­ers of the best high-value prop­er­ties will still find buyer de­mand. How­ever, sales pe­ri­ods will not shorten in the next 12 months.

I think there is a prospect of a re­turn to more ac­tiv­ity from Au­tumn 2012. In­creas­ingly, I be­lieve that Bri­tain will feel much bet­ter about it­self in the sec­ond half of the year and we will see house buy­ers hav­ing greater con­fi­dence about putting their money into bricks and mor­tar. LAST year we sold vir­tu­ally the same num­ber of houses as we did in 2010 and I think this year will be a sim­i­lar story with prices re­main­ing stag­nant.

The mar­ket for houses over £650,000 is slow with a lim­ited num­ber of buy­ers, as is the bot­tom end of the mar­ket be­cause first time buy­ers are still strug­gling to get on the prop­erty lad­der.

The only ex­cep­tion is prop­erty be­tween £300,000 and £500,000 in good ar­eas and in good school catch­ment ar­eas. There might be some price rises here due to short­age of sup­ply.

The auc­tion mar­ket is also strong with in­vestors look­ing to put their money in prop­erty.

joint man­ag­ing di­rec­tor of Ed­dis­ons Res­i­den­tial, Leeds: AT Ed­dis­ons we sell and man­age prop­erty all over the UK so we have a good in­sight into the per­for­mance of dif­fer­ent ar­eas. There is no such thing as a sin­gle prop­erty mar­ket.

Within York­shire we have many mi­cro mar­kets. Leeds city cen­tre, for ex­am­ple, is a spe­cial­ist mar­ket in it­self and one that has strug­gled to shake off neg­a­tiv­ity. Apart­ment val­ues have fallen and, whilst this is bad news for those who bought at the peak of the boom, there is in­creas­ing ev­i­dence to sug­gest that city cen­tre prop­er­ties are now un­der­val­ued and there are some ex­cep­tional buy­ing op­por­tu­ni­ties for those with cash to in­vest.

In the sub­urbs of Leeds, there are strong mar­kets that have held up well and which con­tinue to be pop­u­lar.

This is es­pe­cially so in good fam­ily lo­ca­tions with great fa­cil­i­ties and good schools. Ed­dis­ons Hors­forth of­fice ex­pe­ri­enced steady de­mand through­out 2011 with en­quiry lev­els be­ing high­est for prop­er­ties be­tween £200,000 and £400,000. The Wharfe Val­ley is par­tic­u­larly sought af­ter.

For the com­ing year, we fore­cast much the same as for 2011 with low house price growth but with ac­tiv­ity from buy­ers con­tin­u­ing to in­crease in key fam­ily lo­ca­tions. The worst is al­most cer­tainly be­hind us.

It’s tenants who face the daunt­ing prospect of in­creased rents and com­pe­ti­tion for the bet­ter prop­er­ties as rental de­mand will con­tinue to be strong – per­ma­nently. Tony Wright, head of res­i­den­tial at Carter Jonas agency in York­shire: LAST year was a year of uncer­tainty across the res­i­den­tial prop­erty mar­ket and, un­sur­pris­ingly, I be­lieve that this uncer­tainty is set to con­tinue into 2012.

The mar­ket this year will be con­fi­dence driven and this con­fi­dence is be­ing un­der­mined by neg­a­tive eco­nomic news and the on­go­ing Euro cri­sis. How­ever, these con­di­tions are defin­ing the mar­ket and will not change overnight and so we have to ac­cept this is the way it is and work within these con­fines.

In 2012 it is likely that “best in class” houses will con­tinue to sell well and of­ten amidst com­pet­i­tive bid­ding. Although pur­chasers re­main price sen­si­tive, there are good op­por­tu­ni­ties to achieve premium prices. De­spite the per­cep­tion that buy­ers re­main cau­tious, there are a sur­pris­ing num­ber who are ready, will­ing and able to move and who are frus­trated at the lack of fresh stock.

The key is to at­tract in­ter­est; in­ter­est will lead to of­fers, of­fers will lead to a sale and a cor­rectly man­aged sale will lead to a move. It’s as sim­ple as that.” An­drew Bead­nall of Bead­nall Copley es­tate agen­cies in Wetherby, Har­ro­gate and Ripon: THE last month of 2011 was con­sid­er­ably busier than pre­vi­ous De­cem­bers for many a year and I hope this sig­nals the pub­lic is now realising that prop­erty re­mains an ex­cel­lent home for their in­vest­ments when com­pared to the stock mar­ket and pen­sions.

I pre­dict that, at best, house prices will re­main sta­ble. There will cer­tainly be no in­crease. At worse, there could be a cor­rec­tion of -5 per cent to -10 per cent. Never be­fore has there been so much uncer­tainty in the wider econ­omy be­yond our shores, hence so-called ex­perts con­tin­u­ally hav­ing to change their fore­casts over the past six months. I hon­estly be­lieve that if you are buy­ing for long-term ben­e­fit, be it for a home or buy-to-let, this is a good time to in­vest as the choice of prop­erty is huge and the old adage of “cash is king” has never been more rel­e­vant.

If sell­ing, then do pick an agent who knows the mar­ket in­side and out, who can ad­vise you sen­si­bly of the prices that are ac­tu­ally be­ing achieved. Do not be fooled by those who sim­ply tell you what they think you’d like to hear. That is a sure fire way of spend­ing many months on the mar­ket with lit­tle in­ter­est fol­lowed by con­tin­ual price re­duc­tions, fi­nally ac­cept­ing a price be­low what you would have achieved had you com­menced mar­ket­ing at a re­al­is­tic price in the first place. Tim War­ing of Knight Frank, Har­ro­gate: IF noth­ing else, the next year is likely to be an event­ful 12 months for the York­shire res­i­den­tial prop­erty mar­ket. With talk of Euro­pean divi­sion and dou­ble dip re­ces­sion hardly giv­ing grounds for op­ti­mism, I think 2012 will be a year of re­al­ism but also one of op­por­tu­nity with in­ter­est rates likely to re­main low for the fore­see­able fu­ture. Prices may well drop but if you buy and sell in the same mar­ket and can still achieve the same dif­fer­en­tial does it mat­ter? Sell­ers need to ac­cept what the mar­ket place tells them and buy­ers should still be will­ing to pay for lo­ca­tion, qual­ity or in­di­vid­u­al­ity. It is all a ques­tion of be­ing prag­matic, ac­cept­ing that the world will con­tinue to go round with prop­erty con­tin­u­ing to sell as a con­se­quence, al­beit in an un­cer­tain environment. un­less there are any eco­nomic up­sets.

Stock lev­els and buyer de­mand will re­main very much in bal­ance, and whilst there has been a slight down­ward drift in val­ues to­wards the end of 2011, this has been checked by those ven­dors who have taken a re­al­is­tic view to pric­ing.

The up­per sec­tor of the mar­ket has seen a re­turn of both new list­ings and fresh buy­ers over the last quar­ter and the main­stream sec­tors have ex­pe­ri­enced a steady level of trans­ac­tions which have fol­lowed the ex­pected sea­sonal trends, all be it the trans­ac­tional vol­umes are a lit­tle shy of what we would have ex­pected.

We are an­tic­i­pat­ing a fur­ther modest re­duc­tion in val­ues over the tail end of the win­ter sales pe­riod but ex­pect these to im­prove once more cle­ment weather re­turns and hope­fully, the angst caused by the eu­ro­zone is­sues will ease by Spring 2012. We know that buy­ers don’t like an un­cer­tain field of play, but the ma­jor­ity recog­nise that a house pur­chase should be viewed over the longer term. Tim Blenkin of Blenkin and Co. es­tate agency, York: THE sound­est pre­dic­tion is that prices will not show any dra­matic move­ment in the next 12 months. Frus­tra­tion among buy­ers will, how­ever, lead to deals be­ing done, be­cause life in a rented house is a pretty unattrac­tive op­tion. We Brits like own­ing our bricks and mor­tar and the good news is that, how­ever bad the eco­nomic out­look, we al­ways pre­fer to own for the longer term. Even more cer­tain is that some agents will con­tinue to se­cure in­struc­tions by adding £100,000 to the num­ber they first thought of, and some gullible or greedy own­ers will fall for it, just as they have done for the past five years as the mar­ket has slipped away. So those par­ties, in con­junc­tion, will still be on the mar­ket this time next year, and prob­a­bly be­yond. Martin El­lis, Halifax hous­ing econ­o­mist: THE hous­ing mar­ket has proved highly re­silient in re­cent months de­spite the weak eco­nomic re­cov­ery and the sig­nif­i­cant de­te­ri­o­ra­tion in the out­look for both the UK and global economies.

House sales and the sup­ply of prop­er­ties on the mar­ket have re­mained very sta­ble since late 2010. These steady mar­ket con­di­tions have helped to sta­bilise house prices and sales. As a re­sult, the av­er­age price is cur­rently lit­tle changed from that at the end of last year.

This re­silience in the face of very chal­leng­ing eco­nomic con­di­tions pro­vides en­cour­age­ment re­gard­ing the prospects for next year. Over­all, we ex­pect con­tin­u­ing broad sta­bil­ity in house prices na­tion­ally dur­ing 2012. Prices are again likely to end the year at lev­els close to where they be­gin with the mar­ket con­tin­u­ing to lack any real di­rec­tion.

The prospect of an ex­cep­tion­ally low Bank of Eng­land Bank Rate over the fore­see­able fu­ture is likely to con­tinue to sup­port the mar­ket over the com­ing 12 months. Largely as a re­sult of low rates, typ­i­cal mort­gage pay­ments for a new bor­rower have fallen from a peak of 48 per cent of av­er­age dis­pos­able earn­ings in mid 2007 to 26 per cent in 2011 Quar­ter 3. This is sig­nif­i­cantly be­low the av­er­age of 37 per cent over the past 25 years and is at its low­est since 1997.

Weak eco­nomic growth and the prospect of con­tin­u­ing high, and prob­a­bly ris­ing, lev­els of un­em­ploy­ment led by large scale pub­lic sec­tor job losses, will con­strain hous­ing de­mand. Con­tin­u­ing sig­nif­i­cant pres­sures on house­hold­ers’ fi­nances will also limit many peo­ple’s abil­ity, and will­ing­ness, to buy a home.

Fur­ther ahead, the im­bal­ance be­tween hous­ing sup­ply and de­mand should help to sup­port house prices over the medium and longer terms.

None­the­less, with the ra­tio of house prices to earn­ings still above its long term av­er­age, any price growth is likely to re­main weak over the com­ing few years. Kevin Hollinrake, MD of York­based Hunters the Es­tate Agents: MY pre­dic­tions for 2012 are sim­i­lar to those I had for 2011. Peo­ple talk about the prop­erty re­ces­sion but it’s not the full story. Although vol­umes are low, they are con­sis­tent. Pre-2008, there were around 1.2m trans­ac­tions an­nu­ally in the UK; now it is more like 550,000-600,000 per year. For the fore­see­able fu­ture, while there is a muted lend­ing po­si­tion and an ob­vi­ous lack of con­fi­dence from the house-buy­ing pub­lic, we’re likely to see prop­erty trans­ac­tions con­tinue at the same lev­els. Con­se­quently, I think prices and vol­umes will re­main pretty flat next year.

I would, there­fore, ad­vise those who are sell­ing to not wait for prices to in­crease, in the hope that they will get a bet­ter price for their prop­erty. For it is likely to be two to three years, at the ear­li­est, be­fore we see prices start­ing to rise again. It will hap­pen when lend­ing in­creases.

We’ve set our stall out ready for the first five months of 2012, which we think will be busy and we’re look­ing for­ward to an­other steady year. Ben Prid­den, head of res­i­den­tial sales at Savills York: I PRE­DICT 2012 will be just as er­ratic as this year. Buy­ers’ price sen­si­tiv­ity will con­tinue to be key to suc­cess for both ven­dor and agent in 2012 and be­yond.

Op­er­at­ing in such un­cer­tain times makes plan­ning a sale dif­fi­cult. The tra­di­tional sell­ing sea­sons seem to have less in­flu­ence now on vol­ume of sales. For ex­am­ple in 2010, Au­gust was our busiest month and this year it’s been Novem­ber and De­cem­ber. I sus­pect in cer­tain in­stances there may be merit in launch­ing a house early in the New Year, par­tic­u­larly in York where it’s been a strong mar­ket through­out 2011.

Stag­ger­ingly, prime cen­tral Lon­don prices are cur­rently 15 per cent be­yond the mar­ket’s pre­vi­ous high in 2007. On the con­trary, parts of the Mid­lands and the North of Eng­land have seen falls in val­ues of up to 23 per cent. We are al­ready see­ing Lon­don­ers start­ing to look at York­shire hous­ing as good value and I ex­pect to see a rise in en­quiries from the South East next year.

I have been tip­ping York and Ryedale as star per­form­ers for the last year and sta­tis­ti­cally they have fared bet­ter than much of the North East. For pre­dic­tions next year I am go­ing out on a limb and fore­cast­ing that the North York­shire coast­line will also be a strong mar­ket. Houses in Sand­send and Fylingth­orpe have at­tracted sig­nif­i­cant in­ter­est from buy­ers across York­shire, re­sult­ing in strong sales. Toby Mil­bank, of Strutt & Parker’s Har­ro­gate of­fice: 2011 will be re­mem­bered for be­ing one of ex­tremes. Over the last 12 months we have seen some houses sell for 50 per cent be­low their guide prices and oth­ers sell for 20 per cent above.

The low cost of bor­row­ing has fu­elled the lower end of the mar­ket in 2011, mak­ing it the best per­form­ing sec­tor in the last 12 months, and I do not be­lieve in­ter­est rates will in­crease dra­mat­i­cally next year, if at all.

We ex­pect houses up to £500,000 to re­main the most ac­tive and main­tain the largest pool of buy­ers. We ex­pect price rises of one to three per cent for the best in class prop­er­ties, and nil growth for those with a per­ceived prob­lem.

The £500,000 to £1m range is be­com­ing more po­larised and the best houses in the best lo­ca­tions are sell­ing well. They should in­crease in value by be­tween two and three per cent in 2012. How­ever, those prop­er­ties in sec­ondary lo­ca­tions or with is­sues as­so­ci­ated with them are likely to see price falls of be­tween three and five per cent next year.

We ex­pect the mar­ket for large vil­lage or coun­try houses priced above a mil­lion to im­prove. As buy­ers from within York­shire, as well as from out­side the county, seek out the tro­phy prop­er­ties and the as­pi­ra­tions of ven­dors fall, we ex­pect an in­crease in the num­ber of trans­ac­tions. How­ever, we ex­pect the prices to re­main more or less the same at the up­per end of the mar­ket.

Ad­di­tion­ally, prices should in­crease around the A1 cor­ri­dor to­wards Scotch Cor­ner. With the open­ing of the up­graded A1, buy­ers are realising that a com­mute to Har­ro­gate and Leeds from the north is be­com­ing eas­ier. A short­age of “best in class” prop­er­ties in Har­ro­gate means that de­mand far out­weighs sup­ply.

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