Yorkshire housing market forecast for the second half of the year and beyond

Yorkshire property market predictions for the second half of the year and beyond

Speculation is rife as to what will happen to the residential property market now that the winds of change are blowing. After a hectic two years during which house prices rocketed, the consensus is that house price inflation will begin to slow as the cost of living crisis bites, though a major concern at the moment is that some estate agents are overvaluing in order to win business.

Simon Blyth of Simon Blyth estate agents says: “The core value of homes will remain stable but people will have to be more realistic with asking prices. We are in Yorkshire and people have a sound sense of what is the right money and what isn’t so if you intend to sell then make sure your home is on at a realistic price rather than a hopeful figure.”

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His best advice is to go for an estate agent who is trusted and who will give an honest value rather than one that is boosted in a bid to win an instruction. He also suggests that if you are planning to sell a home, you should do it now rather than wait for the winter months. For those worrying about the future of house prices, Simon adds: “Interest rates are low and the pandemic has taught us just how important home is and there is still no better place to put your money.”

What will happen to house prices and activity?

He adds that the trend for downsizing looks set to continue as people seek smaller, more energy efficient, easy to maintain properties. “The increased cost of running a home will no doubt have an effect on the decision for some but for others, downsizing is about spending more time travelling and enjoying life and less time gardening and cleaning,” says Simon.

Claire Kendall, of Richard Kendall estate agents, believes that the housing market will weather the cost of living storm and adds: “Stock levels remain steady and demand still outweighs supply but I think prices will stabilise, rather than inflate. Estate agents who overprice to win business are an issue but they will find that mortgage lenders are looking very carefully for justification of value. “This will set the good estate agents apart from the not so good because the most difficult part in selling a home is sales progression because there’s a lot of red tape to get through and that is what well qualified, good professional agents do well.”

Tom Watson, Director of Cundalls, which covers rural North and East Yorkshire, agrees that the property market will most likely slow down but not crash.

“Stock levels in the areas we operate in are lower than normal but improving. However, we are finding that certain estate agents are overvaluing to get the instruction and then when a property doesn’t sell because of that, the price is reduced. That’s why we are seeing more price reductions on the property portals, which in turn has a negative impact on buyers because they think values are falling.

“In reality they are not dropping and if a property is sensibly priced we find that it still gets lots of interest. Here in the country and on the coast we are still seeing the effects of the pandemic with people moving here from places like Leeds, Manchester and London to work most of the time from home.”

For those who need a mortgage, Andrew Milnes, business principal at the Mortgage Advice Bureau in Bingley, emphasises that interest rates will rise, as planned. He says: “The Bank of England Interest rate has risen four times since December 2021 and we now have a base rate of one per cent and there is a feeling amongst many economic commentators that rates will continue to rise through the second half of 2022. The Bank of England’s own predictions indicate a base rate of 1.9 per cent by the end of the year.”

However, Andrew adds that the recent interest rate rises do not adversely affect a large number of borrowers, given that around 94 per cent of all the mortgages that his office arranged last year were on a fixed rate basis.

“Unsurprisingly, that figure has increased in 2022 and we are currently fixing around 98 per cent of all mortgages we help to arrange.

“Whilst it is true to say that fixed interest rate pricing has increased, at least this can give clients some certainty as to the level of the repayment for a set term.”

The next announcement from the monetary policy committee will be on June 16 and it is widely anticipated that rates may increase yet again.

At the meeting held in May this year, the vote was six to three in favour of rate rising by 0.25 per cent but Andrew says that, rather tellingly, the three members that voted against an increase of 0.25 per cent actually voted for a much larger increase of 0.5 per cent.

He adds: “While this all sounds rather negative I would suggest that it’s not yet time to panic as many lenders still have some very attractive fixed rate offerings available, especially when we consider average rates of the last 10 years have been closer to five per cent.”