York still making history as city leads the house price recovery
New research reveals the Yorkshire housing market’s leaders and laggers, with the traditional hotspots of York, Harrogate and Ripon setting the pace. Sharon Dale reports.
YORK has always been a jewel of the county, but it’s sparkling like the Koh-i-noor after hitting the housing market headlines once again.
Recently identified as a property hotspot, the city and its suburbs have just come out top in a league of leaders and laggers.
The research by Savills analyses house price data over the past 15 years and reveals that York has outperformed all other areas of Yorkshire and is leading the housing market recovery.
Ben Pridden, of Savills York office, says he isn’t surprised.
“York is quite exceptional. Recently, we had 30 viewings for a house on at £1.6m and that was just on its first weekend on the market.
“That is the top end, but York has many different markets within it which make it the success story it’s become. For example, we have a lot of second home buyers keen to capitalise on the perceived value the city offers. Its historical beauty as well as its sense of community add to its continuing charm as a place to live. Its direct links to Leeds, London and Edinburgh also make it an ideal place for commuters and its good schools mean the city remains a great location for families.
He adds: “On the other hand, the city’s surrounding villages also make the ideal place for families looking to relocate. Here they can still find good value for money within an easy commute to Leeds and London. With many great days out just on the doorstep such as the coast and the North York Moors, there’s little wonder it’s still so popular. The apartment market is holding up thanks to second home buyers and downsizers. In addition, some large employers such as the universities, hospitals and Nestlé ensure there is a continuous steam of professionals looking to buy.”
Harrogate and Ripon also feature high in the regional leaders league.
Georgina Buchanan at Savills Harrogate says: “Traditionally, Ripon is outperformed by Harrogate but in the last 18 months we have seen a significant increase in demand from buyers relocating with work to the North East.”
Nationally, central and south west London are the overall winners and Savills say there is a widening gap between those equity-rich leaders and mortgage dependent laggers. They also believe that some Northern areas could take as long as ten years to recover from the slump that started in late 2007.
“We have known for a long time that certain areas of the country, typically located in London and the South East, lead the recovery before the laggers, often the northern Metropolitan areas play catch up later,” says Head of Residential Research Yolande Barnes, who cites Land Registry figures that reveal values in the leading 10 per cent of the country grew by 7.5 per cent in 2010 and are now just a fraction of their peak in 2007, while in the bottom 10 per cent of areas they dropped by three per cent and remain almost 20 per cent off peak.
“What our new analysis shows is that the recovery ripple effect can take as long as ten years to work through the country, with notable differences in the timing of a recovery both between and within regions.”
Although Savills does not anticipate a repeat of the boom of 2000 to 2005, they forecast that prices will rise in leading locations by a third over the next five years. By contrast, the bottom end of the market will struggle to see any nominal price growth and continued falls in real house prices are forecast.
“As a result, regional market leaders such as Solihull, York, the Cotswolds and Bristol will stand out from their regions over the first half of this decade,” says Yolande.
“The key question is whether the traditional laggers, the likes of Blaneau Gwent, Doncaster and Sunderland, can catch up to the same degree as they did in the period from 2000 to 2005.
“If greater mortgage regulation takes effect, and different lending criteria continue to be applied to equity rich and equity poor borrowers, a significant upturn for the laggers seems inconceivable.
A far more likely outcome is that the structure of these lagging markets will change the most, with the march towards private renting strongest in these areas.”
Predictions are that house prices in the prime property in the top northern locations like York will rise by 2.2 per cent this year, with four per cent increases in 2012 and 2013, a five per cent increase in 2015 and a 5.5 per cent increase in 2015. Prices in the mainstream Yorkshire market are expected to fall by 4. 5 per cent this year and 1.5 per cent next year. Prices will be static in 2013 and in 2014 we’ll see a rise of 3.5 per cent, followed by another rise in 2015 of 4.5 per cent. Savills forecasts that high value, equity rich markets such as York, Ripon and Harrogate will outperform the rest of the market and will lead over the first five years of the recovery. “In our view the market will continue to be led by the most affluent areas. These may be the least affordable, but in a market dominated by cash and equity they will prove the most resilient,” says Lucian Cook.
LEADERS: Top: Village Farm, Galphay, Ripon, £595,000. Middle: The Coach House, Heslington, York, £800,000. Bottom: 12a Franklin Square, Harrogate, £695,000. www.savills.co.uk