The recent performance of different types of prime property in Yorkshire has varied significantly. In York, values are now 8.2% above their 2007 peak, but as soon as you move outside of the city, values are still on average -19.1% below this level. This reflects the wider trend seen across the country as buyers favour flourishing cities such as Cambridge, Bath and Edinburgh.
In the city
In York, average values have increased by 4.6% over the past year, which is double the 2.3% regional average for prime property in the Midlands and North. This growth is being driven by strong demand for a limited supply of prime property.
Since the recession, uncertainty around job security has kept employees close to their desks and this, together with the lack of house price growth outside the city, has left homeowners in York reluctant to make the move out. Another key source of demand in the city centre is from downsizers, often moving from the countryside back to a more urban location with better access to local amenities.
Neighbouring markets
While the demand for city property doesn’t appear to be slowing, we are beginning to see an increase in demand in the neighbouring markets. Our market indicators have improved significantly over the past three months, compared to the same period last year. Across the region the number of homeowners registering an interest in buying a property has increased 29.9% and viewings are up by 13.4%.
This increased desire for property is beginning to be reflected in price growth. Average prime property outside York saw a rise of 0.9% in the second quarter of this year, the only increase since December 2009. The first locations to benefit have been the villages to the south west of York, such as Bishopthorpe and Askham Bryan. From here, the commute to work is still reasonable as both are within a 15 minute drive of York and close to the A64 for access to Leeds.
In the more remote locations, such as the Howardian Hills, the market has yet to see a significant boost, despite the stunning countryside. After a recession, such rural areas across the country are the last to feel the recovery. However, there are early indications that these areas have now reached a turning point.
From the capital
Yorkshire has been one of the locations to benefit from an increase in buyers moving from London, who have accounted for 17% of buyers so far this year. By comparison, last year this figure was 11% and in 2012 just 3%.
This reflects the fact that the gap between average house prices in London and the rest of the country is at an all time high, especially when comparing London homes with property in the Yorkshire countryside. The average asking price of a four bed property in the south west London borough of Wandsworth is £1.27 million compared to £350,000 in York and £365,000 in the local authority of Hambleton, according to Rightmove data.
Transaction levels
Many older couples from London or the South East are buying a property in this region with a view to moving once they retire or when their children have left home. These buyers often do not need a mortgage as they have seen their housing wealth build up over past decades.
By contrast, buyers who do need a mortgage face bigger constraints and are more exposed to future interest rate rises. Transaction levels across the country have improved over the last year, but they still remain 40% below the levels seen in 2007. In North Yorkshire and York, transactions are 22% below their 2007 levels and sales above £1 million have fallen by 40%.
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