York­shire has a prop­erty mi­cro­cli­mate and the fore­cast is good

Prop­erty Opin­ion

Yorkshire Post - Property - - PROPERTY NEWS -

Tony Wright, Head of Res­i­den­tial Agency, Carter Jonas, Har­ro­gate

THE UK prop­erty mar­ket is all too of­ten dis­cussed as a sin­gle en­tity, with com­men­ta­tors fail­ing to recog­nise the nu­ances of each re­gional mar­ket. Read­ing the na­tional news, it’s easy to be­lieve that the UK’s prop­erty bub­ble is about to burst, prices are flatlin­ing, buy­ers are crip­pled by the Stamp Duty Land Tax re­forms of 2014, Brexit has cre­ated a cli­mate of un­cer­tainty and the shadow of Trump con­tin­ues to loom large across the At­lantic.

How­ever, I’ve come to digest these re­ports with some in­dif­fer­ence, be­cause they have little bear­ing on the York­shire mar­ket, which has de­vel­oped its own ro­bust prop­erty mi­cro­cli­mate.

As far as York­shire is con­cerned, de­mand on the whole out­weighs sup­ply, which is the op­ti­mum equa­tion to un­der­pin a thriv­ing prop­erty mar­ket. While prices have un­der­gone steady growth since the last mar­ket trough of 2008, the rate of growth has been sus­tain­able and buy­ers have con­tin­ued to af­ford the next rung up the lad­der. By con­trast, the mar­ket in Lon­don and the South East has ex­pe­ri­enced un­sus­tain­able ac­cel­er­a­tion in house price growth.

The men­tal­ity be­hind both mar­kets is dis­tinct; while buy­ers in Lon­don and the South East are ac­cus­tomed to prop­erty in boom and bust cy­cles, buy­ers in York­shire have found a new con­fi­dence in the de­par­ture from this pat­tern. Steady growth has meant that buy­ers are pur­chas­ing prop­erty as a longer-term in­vest­ment, rather than look­ing to cash in on cap­i­tal ap­pre­ci­a­tion after a year or two. This in it­self has in­su­lated York­shire from the over-in­fla­tion in Lon­don and the South East.

This has also rein­tro­duced the plea­sure of buy­ing prop­erty. Buy­ers are tak­ing the time to con­sider the en­joy­ment of liv­ing in a prop­erty, rather than it feel­ing little more than a busi­ness trans­ac­tion.

Fur­ther­more, Lon­don and the South East’s mar­ket is made up of ‘ac­ci­den­tal mil­lion­aires’, home­own­ers whose prop­erty has rock­eted in value since pur­chase, push­ing their most valu­able as­set over the mil­lion-pound price point. While this might sound like a model to which we should all as­pire, Stamp Duty is prov­ing to be an in­sur­mount­able hur­dle. For those ac­ci­den­tal mil­lion­aires wish­ing to move house, the cost of an ex­tra bed­room on av­er­age amounts to an­other £100,000 to £200,000. As­sum­ing that a ven­dor is sell­ing a prop­erty val­ued at £1,000,000 and up­siz­ing to a prop­erty val­ued at £1,200,000, the Stamp Duty is £63,750, and that is be­fore fac­tor­ing in mov­ing costs. Of course, when a home­owner is only a mil­lion­aire in as­sets, find­ing over £60,000 in avail­able cash to meet the de­mands of Stamp Duty can prove im­pos­si­ble.

In York­shire, be­cause we aren’t fac­ing the ac­ci­den­tal mil­lion­aire prop­erty co­nun­drum to the same ex­tent, and be­cause prices have grown steadily rather than un­sus­tain­ably, ap­pli­cants who are buy­ing over the £1,000,000 thresh­old are do­ing so be­cause they have the as­sets and cash flow. This means that, for the ma­jor­ity, Stamp Duty isn’t quash­ing the mar­ket.

Of course, ir­re­spec­tive of our dis­tance from Lon­don and the South East, the prop­erty mar­ket is linked to the broader econ­omy but Leeds, and to some ex­tent York and Har­ro­gate, have emerged as pri­mary busi­ness hubs. The ar­rival of big ac­coun­tancy and le­gal firms of­fers an un­der­ly­ing strength that safe­guards a new wave of em­ploy­ment op­por­tu­ni­ties for the next gen­er­a­tion. They are of course the home­own­ers of the fu­ture, so while the jobs mar­ket is bur­geon­ing, York­shire’s prop­erty mar­ket is set to pros­per with a level of in­de­pen­dency and de­tach­ment from the me­chan­ics of Lon­don and the South East.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.