Yorkshire recorded the UK’s greatest rise in house prices over the past month with a 1.7 per cent increase, well above the 0.9 per cent UK average, according to the latest market report from Home.co.uk.
The news comes as the Royal Institution of Chartered Surveyors reveals a positive five-year forecast for house prices. It concludes that residential property values will continue to rise at a firm pace with the North of England, Northern Ireland and Wales recording the steepest increases. The consensus is that average house prices will increase around four per cent per annum.
The latest RICS Residential Market Survey also shows the number of new homes listed for sale has risen marginally for the first time in twelve months, despite ongoing caution over the rocketing cost of living and higher interest rates. Although the small increase is encouraging, the average number of properties on estate agents’ books remains close to historic lows.
As for the rental sector, RICS survey contributors anticipate rents to rise by four per cent in the next twelve months and five per cent a year over the next five years.
RICS chief economist, Simon Rubinsohn, says: “Despite mounting concerns about both the macro environment and the war in Ukraine, for now the feedback to the RICS survey shows the housing market remains resilient. Rising interest rates have begun to push up the cost of mortgage finance but debt servicing remains low in a historic context which helps to explain why the new buyer enquiries indicator remains in positive territory.”
The Home.co.uk report shows that the average asking price for residential property in Yorkshire is now £236,283 with stock levels down and a 38 per cent fall in the typical time on the market. Yorkshire still has the third lowest average asking price in the UK with the North East the least expensive with an average of £182,483 and Scotland the second cheapest at £208,678.
Market analysts at Home.co.uk say that property is moving through the market at a record pace due to buyer demand, pushing the typical time on the market for property in England and Wales to 55 days, which is 31 days less than in April 2021.
While Yorkshire saw the greatest monthly increase in property prices at 1.7 per cent, year-on-year growth is 4.3 per cent. The South West saw the highest annual rise with 9.6 per cent. The North West recorded 6.7 per cent and the North East 5.2 per cent. However, the report points out that monetary inflation is high and climbing, thereby making real home price growth progressively more negative despite the apparent high nominal growth.
Doug Shephard, director at Home.co.uk, says: “Market commentators who were predicting a slowdown this year will be regretting their hasty words. It is difficult to understand how they could come to such a conclusion given that interest rates are still very low; the hikes forecast by the Bank of England are miniscule by historic standards; economic uncertainty is driving safe-haven investments and, at current levels, inflation is rapidly eroding mortgage debt.
“The fact is that the 2022 UK property market is continuing to follow the trend set in 2021, albeit at an even more frantic pace. Scarcity also persists across all regions with the average stock total drop at 23 per cent. All current evidence, therefore, suggests that strong price growth will occur during the coming months.”
He adds: “Demand for property is not going to diminish. An 80 per cent loan to value mortgage is a great deal right now when you consider that rising property values will broadly protect the value of the deposit while inflation will erode the outstanding debt at the rate of the difference between the mortgage interest rate and inflation. This quirk of current economic policy is unprecedented in the economic history of the UK.”
Rightmove’s latest rental tracker shows that the national average asking rent outside of London hit a new record of £1,088 per calendar month, up 10.8 per cent on last year. Average rents are now 15 per cent higher than the same period two years ago, just as the pandemic started. Rents in Yorkshire rose by 2.3 per cent in the first three months of 2022 and by 11.2 per cent year-on-year bringing the average rent to £848 per calendar month.
Rightmove say that tenants are now faced with the most competitive rental market ever recorded by Rightmove, with more than triple the number of prospective tenants as there are rental properties available. Tenant demand is up six per cent and available properties are down by 50 per cent compared to last year. The situation is even more dire in London where average asking rents hit a new record of £2,193 pcm which is a 14.3 per cent rise on last year.