Why 2024 looks more positive for the Yorkshire property market

A raft of reports on the residential property market arrived this week and the consensus seems to be that better days are ahead but don’t get carried away.

Buyers are still price sensitive so being over optimistic on the value of your home could see it languishing with a “For Sale” sign up for months without an offer.

The good news via Zoopla is that Yorkshire has seen the UK’s highest growth in the number of home sales agreed with a year-on-year rise of 19 per cent. The average UK increase is 13 per cent.

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The neighbouring North West and North East both registered a three per cent increase.

The housing market is improving slightlyThe housing market is improving slightly
The housing market is improving slightly

As for annual house price growth, Yorkshire came out top of the English regions with a 0.5 per cent rise over the last 12 months.

The North West recorded a 0.3 per cent rise and prices in the North East remained static. The greatest falls were in the East of England, which saw a 2.5 per cent drop in home values.

Analysts at the propertyt portal say the return of pent-up demand and some mortgage rates falling below five per cent have boosted the market.

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There is also evidence that buyers and sellers are becoming more aligned on pricing. One key trend in 2023 was sellers cutting asking prices to attract interest and this has continued into 2024.

Zoopla adds that higher levels of sales activity in early 2024, following on from the final weeks of 2023, are evidence of greater alignment between buyers and sellers on pricing, which should mean less need for house prices to fall much further to support sales.

London has led the rebound in new buyer demand in 2024 so far and this may be an early sign that the tide is turning for the London sales market after seven years of lacklustre activity compared to the rest of the UK. London house prices have risen just 13 per cent since 2016 compared to 34 per cent at a UK level.

Richard Donnell, Executive Director at Zoopla, says sellers must be willing to negotiate on price and adds: “It remains a buyer's market. Sellers looking to move should be encouraged by these early signals of activity but buyers remain price sensitive and focused on value for money. Over-optimism by sellers could quickly stall the current improvement in market activity.”

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Over at the Halifax bank, there is news on first time buyers. More are pairing up to buy a home and almost two thirds of mortgage completions are now in joint names due to the increase in deposits over the last decade.

First-time buyers put an average deposit of £53,414 down last year, £21,000 more than ten years ago.

Although the average salary is 30 per cent higher than it was a decade ago, getting together a deposit large enough to put down on a first home means raising more than a year’s average pay.

Those buying a property for the first time continued to be the majority, 53 per cent, of all home loans last year. However, the overall number of first-time buyers fell by 21 per cent over the same period.

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The average house price for buyers entering the housing market in 2023 was £288,136, which is five per cent lower than the previous year. Despite this, house prices for first-time buyers remain over £132,000 more expensive, on average, than ten years ago. The average first-time buyer in the UK is now 32 years old.

Kim Kinnaird, Director of Halifax Mortgages, said: “The overall fall in house prices in 2023 will go some way to helping people get on the ladder for the first time but these buyers are still dependent on a steady supply of properties in their price range, while faced with the continued pressure of saving for a deposit when rent and living costs are high.”

She points out that there are schemes available to support first-time buyers, including the mortgage guarantee scheme, which allows lenders to offer up to 95 per cent mortgages to first-time buyers and this has been extended until June 2025.

There is also the First Homes scheme, which offers discounts of at least 30 per cent on new-build homes to first-time buyers.

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Unlike shared ownership, there’s no rent to pay but you can usually only sell the property to someone who is eligible to buy a First Home and you must give them the same percentage discount that you got.

Across the UK, all regions saw a fall in the number of first-time buyers entering the market last year. Yorkshire was 21 per cent down.

There have been hints that the government is considering a new Help to Buy mortgage guarantee scheme to help first time buyers qualify for a 99 per cent mortgage. We will see if th is comes to fruition when the pre General Election Budget is revealed on March 6.