A new report on prime property shows a flight to the city and a struggle for homes over £1m. Sharon Dale reports.
It’s easy to feel envious of Yorkshire’s most expensive homes but new research shows that some of the top properties have failed to keep pace with the average semi.
New research into prime property shows that prices of the top five per cent of homes in the region have risen by an average 2.3 per cent over the past 12 months, while the mainstream market has seen an increase of 3.1 per cent.
The best homes in York are bucking the trend with an annual growth of 4.6 per cent. This represents a flight to the city from rural areas, a lack of supply and an increasing number of cash rich buyers from London and the south east.
Sophie Chick, Residential Researcher at Savills, says: “The growth is being driven by a supply and demand issue. There is high demand, especially from downsizers looking to move from the countryside into the city where there are better amenities. “The supply is limited because homeowners are reluctant to move out of York. This is due to uncertainty about job security, which means employees want to be close to work, and a lack of house price growth outside the city.
“We are seeing the same trend in other attractive cities like Cambridge, Bath and Edinburgh.”
House hunters from London are having a significant effect on the prime property market in Yorkshire, as the North South divide in prices becomes irresistible. They account for 17 per cent of all buyers compared to 11 per cent last year and three per cent in 2012.
“You could sell a house in Fulham for £2.5m, buy a beautiful home here for £1m and put £1.5m in the bank. That’s a very persuasive argument,” says Ben Pridden, of Savills York.
“A lot of London buyers target York because we have nationally important private schools here and fast rail links to London. A lot of the buyers travel back to London for business one or two days a week.”
There are rich pickings in Yorkshire’s £1m plus market, where values have been especially slow to recover from the recent recession. Transaction numbers are also lagging behind the rest of the market.
Rural north Yorkshire’s prime properties achieved a 0.9 per cent increase in prices in the second quarter of this year, the first rise since December 2009.
Ben Pridden says; “Places like the Howardian Hills, which have always been very desirable, have been slow to recover their value, and that has been surprising. But indications are that prices have now reached a turning point and we are beginning to see positive growth and greater demand.
“If anyone is thinking of moving to the country then now could be the time to do it. There is a 20 per cent difference between prices in villages like Terrington and central York but the gap is closing.”
Down in the mainstream market, average prices in the UK rose by 7.1 per cent over the past 12 months, buoyed by London figures . Yorkshire enjoyed a steady 3.1 per but prices are still 17 per cent below the 2007 peak. York is again the top performer with an annual growth of 5.5 per cent leaving values at just 2.5 per cent below their peak. The average price of a home in the county is now £118,835.
Savills latest study of rent and mortgage payments per household shows that Leeds is the most expensive place to live with costs of £5,115 per year. York is a close second at £4,756. The cheapest housing costs are in Scarborough £2,938, and Hull, £3,226. The Yorkshire average is £3,894.
All the number crunching adds up to a sunny forecast for Yorkshire property. Savills expect Yorkshire prices to show a five per cent annual rise by the end of 2015 with similar growth until 2018 when the five year growth is expected to stand at 19.3 per cent against a national average of 25.7 per cent.
“There is a slight threat to the top end of the market next year around the time of the general election as the taxation of high value properties is high on the political agenda. Stamp duty has already increased for properties over £2m and any further changes risks a period of sobriety,” says Sophie.
“However, the outlook for prices remains positive with a period of growth to the end of 2018.”