Is your home a house price winner or loser?
Our house price league table reveals Yorkshire’s winners and losers over the past ten years, while shining a spotlight on affordability. Sharon Dale reports.
York tops a league table that measures house price performance in region over the past ten years. But the research shows that values in just over half of local authority areas in Yorkshire have yet to recover their 2007 peak.
York tops the table for price performance.
The data, compiled exclusively for the Yorkshire Post by Savills, also reveals the least and most affordable places to buy.
Booming York has earned its number one spot thanks to an influx of well-heeled buyers. Attracted by the city’s medieval charm, proximity to the coast and countryside, good schools and fast rail links to London, they have helped push house prices up by 26.3 per cent over the past decade and by 4.4 per cent year-on-year from August 2016 to 2017. The average house price in York is now £255,897, but while it takes the number one spot for price growth, it comes second to Harrogate for unaffordability.
The average house price in the desirable spa town is now £322,730, which is just over ten times the average income. York’s house price to income ratio is 8.27 per cent. Harrogate is the second best performer in the price league with a 14.9 per cent rise in values over the last ten years and a 4.5 per cent annual growth between August 2016 and 2017.
Scarborough saw the biggest year-on-year rise of 6.9 per cent but values in the coastal area are still 2.1 per cent lower than at the peak of the market in 2007. Ryedale, which includes Malton, Pickering, Helmsley and Kirkbymoorside, saw the second highest annual growth with a rise of 5.9 per cent, though prices have only increased by 5.5 per cent since 2007.
Hull is the most affordable place to buy in Yorkshire
Other areas which have had a growth spurt over the past year include North Lincolnshire, 4.8 per cent; Doncaster, which has seen a 4.6 per cent improvement on 2016 values, the East Riding at 4.4 per cent; Hull at 4.3 per cent and Hambleton with 4.2 per cent. Sheffield, with a ten-year house price growth of 8.5 per cent, beat Leeds (6.3 per cent) to third place in the table.
A surprisingly poor performer is Richmondshire, which takes in the gorgeous Georgian town of Richmond and a host of beauty spots in the Yorkshire Dales National Park. Prices there are still 2.6 per cent below their 2007 high and it was the only local authority area to record a year-on-year decline with values in August 2017 slipping 4.7 per cent compared to August 2016, bringing the average house price to £230,236.
Bottom of the league is Bradford, where prices are still 7.9 per cent less than they were ten years ago and annual growth was 1.3 per cent, giving an average price of £158,684. Barnsley, where values are 6.7 per cent below their 2007 peak, is a close second.
Hull, celebrating a triumphant year as the UK’s City of Culture, takes top prize for the most affordable place to live in Yorkshire. The house price to income ratio is 4.04, which makes it more than twice as affordable as Harrogate. The average property price in Hull is £115.959, though you can find a two-bedroom terraced home from £40,000.
As for the future, Savills recently issued its five-year forecast and predicts that Yorkshire could see prices rise at more than double the rate in London. The North West, buoyed by economically vibrant Manchester, is predicted to see the greatest growth with an 18 per cent increase in prices, closely followed by Yorkshire and the North East at 17.6 per cent. Harrogate prices are expected to outperform neighbouring York with a 17 per cent rise by 2022. York is predicted to see a 14 per cent increase.
London, which is trailing most of the regions, could only see a seven per cent rise between 2018 and 2022, though the capital’s prime markets should show stronger growth, Average house prices in the capital stood at £479,100 in August this year, according to the Land Registry, which is 12.9 times the average earnings. Savills say that property there is accessible only to more affluent dual-income households, which will restrict potential future growth in the capital and act as a drag on its commuter belt.
In Yorkshire, house prices are relatively modest compared with incomes, with the average house price of £151,482 being 5.7 times the average individual’s annual earnings.
Ben Pridden, head of residential at Savills York, says: “Unlike many other parts of the country which have seen significant growth across the last five years, Yorkshire hasn’t benefited to the same extent. The result being that we have got some way to catch up, which is borne out in our latest residential property forecast.
“York city is perhaps an exception as it has benefited from significant growth in recent years, but what we’re beginning to see now is more rural addresses catching up, which is a very positive sign.”
Lucian Cook, Savills head of residential research, adds: “Uncertainty over what Brexit means for the UK economy and how it will impact household finances will increasingly act as a drag on house prices. There is capacity for growth once we have greater clarity, but this will be constrained by interest rate rises and the corresponding ability to get mortgage debt, particularly in London and other higher value locations.”
Savills expect property transactions to dip before gradually returning to around 1.2 million by the end of the five-year forecast period, still around half a million below their pre-credit crunch level.
It believes that people will trade up the housing ladder less often as they struggle to accumulate the equity and additional borrowing required. First-time buyers will remain heavily reliant on the Bank of Mum and Dad or government initiatives such as Help to Buy.
Savills say that the number of first-time buyers is within five per cent of pre-2007 levels but believe that the potential for further significant growth is limited in an age of mortgage regulation where deposits are likely to remain high.
The constraints this imposes vary across the country and the extremes seen in London are unrepresentative of the majority of the rest of the UK. In the South East, the average household income of first-time buyers exceeds £50,000 and the average deposit is a considerable £48,000. By contrast, in the North West and Yorkshire, the average income of a first-time buyer is just over £35,000, and the average deposit is £19,000.
Researchers also found that cash buyers have become more dominant and this trend will continue. They now account for 34 per cent of all house sales. Buy-to-let purchasers are predicted to fall by a quarter and those landlords who do buy are expected to focus on yields, hunting for property in urban locations outside London, such as Manchester and Leeds.