Latest news on Yorkshire house prices and the state of the rental market

The latest report from Rightmove shows that the average price of UK property coming to the market for sale rose by 1.5 per cent this month to £368,118. There was aso an increase in buyer demand.

Average asking prices are still £4,776 below the May 2023 peak and the increase in buyer activity suggests that more are seeing a window of opportunity to buy.

Rightmove analysts believe that the signs are that overall activity levels have now returned to steadier pre-pandemic norms. However, the elevated level of mortgage interest rates mean that the increased activity is skewed towards those buyers who are less sensitive to higher mortgage costs.

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Tim Bannister, Rightmove’s Director of Property Science, says “March is typically a strong month for asking price growth, as both buyer and seller activity levels rise and the spring selling season gets underway.

Asking prices are upAsking prices are up
Asking prices are up

“However, the stronger than usual price growth this March indicates that new sellers are feeling much more confident, with some perhaps being over-optimistic, that there is enough buyer activity and affordability in their local market to achieve a higher price.

“Despite the above average price increases in this opening three months of the year, asking prices are still below their peak in May 2023. For those who can afford to buy and have yet to take action to move this year, this may provide a window of opportunity to buy as we now seem to be past the bottom of the market.

“While some sellers are still being over-optimistic with their pricing expectations, there are also more sellers who are aware of the need to be negotiable and realistic, with elevated interest rates compared to recent years still stretching affordability for many buyers.”

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Over at Zoopla, analysts say that the rental market remains locked in an imbalance between supply and demand, though this is slowly starting to narrow and leading to slower growth in rents

Its latest report shows that UK rental inflation has slowed to 7.8 per cent, down from 11 per cent a year ago bringing the average rent to £1,223per month, according to the latest Rental Market Report from property website Zoopla.

Yorkshire rents have risen by 7.6 per cent year on year bringing the average monthly rent to £799. The neighbouring North West saw a 9.8 per cent increase taking average rents to £848 while the North East saw a 9.9 per cent lift pushing average rents to £695 per month.

In Leeds the annual increase was 7.2 per cent and the average rent is £969 while in Sheffield the average rent rose seven per cent taking the average rent to £809. Neighbouring Manchester saw a 9.6 per cent annual growth taking the average rent there to £1,070

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The average letting agent currently has 12 homes available for rent which is a fifth higher than this time last year but still 28 per cent lower than the pre pandemic average. The typical home for rent sees 15 enquiries which is significantly reduced from 40 enquiries per property in 2021, but still double pre-pandemic levels.

The moderation in rental growth is primarily due to weakening demand and growing affordability pressures rather than any major expansion in available supply. Only a sustained expansion in rental supply will alleviate the pressure that tenants face from higher rent levels.

London leads the rental slowdown with rents up by just 5.1 per cent, down from 15.3 per cent a year ago. The balance between supply and demand has narrowed the most in London, with demand 30 per cent lower than a year ago and available supply increasing by the same amount.

Over half of rented homes are in markets with average rents over £1,000 per month which is almost double the level five years ago. This can be attributed to the pandemic years driving a step change in rents which have increased by 29 per cent since January 2020.

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The growth in rents at £1,000 per calendar month is expanding to regional markets outside the south of England. The North East is the only area with no markets over this level, while Yorkshire and the Humber has just four per cent.

UK rental inflation is predicted to halve over 2024 to five per cent with average earnings growth to slow to just below four per cent, which means rental affordability will not improve in 2024.

Richard Donnell, Executive Director at Zoopla, says: “The last two years have been characterised by an ongoing imbalance between rental supply and demand. This has pushed rents for new lets 30 per cent higher since 2021 adding to cost of living pressures for renters.

“The imbalance between supply and demand has started to narrow but is far from closed. Rents for new lets will continue to rise over 2024, albeit at a slowing rate. Rents remain at their most expensive compared to average earnings for over a decade. Only a rapid and sustained expansion in rented housing will start to improve affordability for UK renters.”