Future for Yorkshire house prices looks positive
While the housing market is restricted at the moment, it is not completely dormant. Deals are still being done, notes of interest in properties are being taken and virtual viewings are underway. For those worried about a fall in values, there is some reassurance. Most economic forecasters predict that while transaction volumes will suffer during the coronavirus crisis, house prices will not plummet.
Simon Blyth, whose estate agency chain is based in West and South Yorkshire, agrees: “We are still seeing some activity at the moment. It’s not as it should be at this time of the year but it’s there, particularly among developers who want to buy sites.”
He believes that when the crisis is over, pent-up demand among those keen to move house or buy their first home will boost the market back to where it was pre-lockdown. “There will be a bounce back because the desire and need to move will still be there. There was already pent-up demand before coronavirus caused by Brexit uncertainty and the election. Plus, by the time restrictions are lifted, some people will have become fed-up with their own home during lockdown.
“They may want a bigger house, a bigger garden, another bathroom. Others will have decided that they don’t want to be with their partner and grown-up children who live with parents may be even more keen to get their own house.” He adds that this predicted increase in activity, along with low interest rates, will ensure that house prices don’t fall.
Edward Hartshorne, managing director at Blenkin & Co, which specialises in selling prime property in North and East Yorkshire, says: “The number of sales will inevitably plummet over the next few months but suppressed demand may keep a hold on values.
“I think the housing market will respond energetically to the economic bounce when it does come, leaping into action and spurred on by an eager and cooperative market of buyers and sellers. We have already signed-up clients eager to launch 20-odd houses just as soon as normality returns. My feeling is that only those properties that languished unsold before the pandemic will take a significant price hit, although it might be 2021 before business as normal returns.”
Alex Goldstein, a Yorkshire-based property consultant, says we are now in a “pause phase”: “Two months ago, the market was quickly accelerating and confidence had returned. Now that people are ‘locked down’, they are spending more time on the property portals and have time to plan for their lives in a post Covid-19 market.
“This means that demand and new supply will be strong post lockdown. We now have the lowest base interest rate in our history. This will filter through to the lenders, which will make money even cheaper to borrow. Prices will hold steady for now and we will see a gradual increase over the next few years as demand continues to outperform supply.”
He also predicts that the change in working patterns, made necessary by coronavirus, will result in more people moving to Yorkshire. “Employers have now experienced how staff can work from home and I think that employees will push for this lifestyle choice. As we are already seeing, this will lead to more people leaving London and the Home counties for God’s Own County.”
Savills also say that the housing market has potential to recover quickly once restrictions are lifted. It believes that in the short-term, UK house price falls could be five to 10 per cent but on very low levels of transactions.
Lucian Cook, head of residential research at Savills, says: “The pace of recovery from that point will depend on the state of the wider economy. Brexit uncertainty may act as a drag on consumer and business confidence and dampen any recovery in house prices and transaction levels from the last quarter of 2020. On the upside, households whose incomes remain stable and secure will be able to take advantage of historically low interest rates.
"This should support a return to stronger levels of price growth in the medium term. Assuming long-term damage to the economy is contained, we expect the five-year outlook for prices to remain similar to our November 2019 forecasts but with a different distribution of growth year to year.”
Savills predicts that Yorkshire could see house price growth of 21.6 per cent by 2024, compared to 15.3 per cent across the UK as a whole.
Lucian adds that most forecasters agree that the likely scenario is a sharp, short economic contraction in 2020, particularly between April and the end of June, followed by a rebound in late 2020 or early 2021.
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