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.

Yorkshire Post - Property - - PROPERTY -

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

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