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.
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.