Steady rise predicted for Yorkshire’s property market

House prices are a national obsession but they are also a source of angst for many families.

While homeowners are keen for their greatest asset to rise in value and secure their financial future, their children are priced out of the market. So the latest five year forecast from Savills could be good news for those who feel torn between self-interest and the greater good. The prediction puts Yorkshire mid-table in the property price league.

According to researchers from Savills, Yorkshire will see an average 16.5 per cent rise in prices by 2019. This year will end with a four per cent increase, while next year will see a dip to 1.5 per cent, thanks to uncertainty caused by the election. In 2016 and 2017 growth is predicted to 4.5 per cent each year, slowing to 2.5 per cent in 2019.

There are likely to be significant variations across the county, with golden triangle hotspots like York, Ilkley, Harrogate, Wetherby and north Leeds, outperforming less desirable areas.

The UK average five year total will be 19.3 per cent, which represents a period of calm after the boom and bust of the past decade.

London, which has seen prices rise by 15 per cent this year, is a surprisingly poor performer and values will remain stagnant next year and are forecast 
to grow by just over 10 per cent by 
2019.

In contrast, the buoyant South East is expected to show the strongest growth, at 26.4 per cent as buyers priced out of London look beyond the capital. The regions facing the lowest house price increases are the North East, with a 12.6 per cent rise over the next five years, and the North West with 13.7 per cent.

Savills say that affordability, tighter mortgage regulations and the threat of interest rate rises are beginning to slow both price growth and activity.

The North of England has greatest capacity for growth based on affordability measures, but the strong economic drivers are not in place to support it, according to the property firm. “Mainstream property market performance will be limited by buyers’ capacity to borrow and service debt, but we don’t believe interest rate rises will be severe enough to trigger a wholesale market correction, so we are not forecasting price falls,” says Lucian Cook, UK head of residential research at Savills. “We expect wage rises,” he adds, “while mortgage regulation is likely to prompt greater reliance on the bank of mum and dad with more equity released by downsizing.”

Despite the Government’s best efforts with mortgage guarantee schemes experts fear there will be no rise in the numbers of first-time buyers. Ben Pridden, of Savills York, adds that some people may also be disappointed with Yorkshire’s predicted 16.5 per cent rise over five years. “In some areas it means that house prices will still be worth less in 2019 than they were before the credit crunch.”

Kevin Hollinrake, managing director of Hunters estate agency, believes the outlook is quite positive. “We need a housing market with single digit growth each year, ideally between three and five per cent,” he says. “It means that prices are going in the right direction for owners and investors but they aren’t going out of reach for first-time buyers.”

For those looking to invest in a 
buy-to-let, he suggests that the safest place to put money is York and 
popular towns like Harrogate and Wetherby.

If Savills figures prove correct bricks and mortar won’t be a get rich quick scheme, but Kevin says: “I think the next five years will be a good phase for the property market with steady growth. Hopefully, we have learned the lessons of the past and lending will remain under control, acting as natural brake for prices.”