Now is the time to put your money in bricks and mortar
OF all of the reports and analysis available to the public, the Land Registry statistics shows the actual transactions that occur across the country. No misinterpretation, no positive spin from a mortgage company or an estate agent, just hard facts.
The Land Registry facts for North Yorkshire show a reduction in average house prices across the region from just below £200,000 at their peak in mid-2007, to £168,000 as at the end of October 2013. Sadly, the statistics from our county are not particularly impressive over the last six years, with only a few small pockets showing any growth in sale prices. Even Harrogate, the honey pot of the north, is still showing an average house price of one per cent below the peak of 2007.
The North has lagged behind most of the rest of the country, particularly London.
This gap between North Yorkshire and the South East can be demonstrated by average house prices in Greater London of £350,000 in mid-2007 and currently, the average is at around £393,000, an increase of 12 per cent.
We know that the North lags behind the South in terms of price rises, this is accepted as a rule, but when will we see real price growth in North Yorkshire and why is it taking so long?
As usual, there is never a simple answer but we believe that the main reason is the lack of disposable income in the north.
If 100% is the national average household income in the UK, North Yorkshire averages 88.2% of the national average, with Greater London at 128%. North Yorkshire lies lower than that of Scotland at 96% of the average.
We need to see the amount of disposable income increase across the region before prices will rise in North Yorkshire, or alternatively, we need an influx of buyers from more affluent parts of the county or abroad.
This is a particular area of interest for us. In the last 12 months we have sold 45% of our houses to buyers from outside the county. This is considerably higher than average of around 30% for the last five years.
There is already growth in some parts of some towns. Ilkley, Harrogate and a small pocket in the centre of York all showed positive growth in the last three months. Apartments on Beech Grove, Harrogate, overlooking The Stray have seen price rises of approximately 15% in the last six years. Could this be the start of some real price rises in North Yorkshire?
We believe that this is the case. The confidence is returning, people are starting to earn more and the desire to be more “upwardly mobile” is upon us.
Now that buyers is feeling more secure in their workplace, the signs are showing that we are at the start of an upward curve in prices. New buyer registrations are up from this time last year, numbers of offers received are up over the same period but interestingly, the amount of new properties coming to the market across the county is about 20 per cent lower than this time last year.
Accordingly, we predict average price rises of 3% to 5% in North Yorkshire over the 12 months of 2014, as long as interest rates remain at their current low levels.
The decision by the Government to launch the next phase of the Help to Buy scheme three months earlier than planned has also had a positive effect on confidence in the short term.
Whilst interest rates remain low, this should be the time to get your money back into bricks and mortar and if you are thinking in of getting your foot on the ladder or moving to the region, do it soon.
Wise buyers will make their move in the next six months.
Forecasters are predicting house price increases. PriceWaterhouseCoopers suggest that UK property prices could rise by more than 20 per cent in the next seven years, with the price of an average home increasing in value from £225,000 to £300,000.