Steady growth is the forecast for Yorkshire house prices this year but what else does 2016 have in store? We asked the region’s property experts for their predictions.
Andrew Beadnall, Beadnall Copley.
“The last four months of 2015 saw a shortage of new instructions coming to the market which in hindsight was a missed opportunity for sellers. For those of you waiting for “the daffodils in the garden” moment before you come to the market in 2016 I would urge you to get your home up for sale now, in January, as the last week of this month is traditionally one of the best-selling weeks of the year.
Areas seeing strong demand include the popular villages of Boston Spa and Collingham due to the them being self-sufficient in terms of schools, shops, medical centres and great road access. In Harrogate, the Cold Bath Road area has become our region’s answer to Notting Hill due to its vibrant coffee house and artisan shopping culture. In Ripon, properties close to the city have been keenly sought due to the Grammar School. Tadcaster and its surrounding villages have also seen positive interestAs for house price forecasts, I’m going to plump for a riose of 5% with premium areas seeing an increase of 7-10% by the year end due to continued scarcity across all price brackets.”
Tim Waring, head of Knight Frank Yorkshire.
“I expect 2016 could prove to be a lively marketplace. The latter part of 2015 saw a noticeable lack of residential property coming to the market, with the prospect of pent-up demand placing some pressure on prices, which bodes well for those contemplating selling in the first half of the new year. The vogue for town living in the likes of Harrogate and York will continue, and I expect to see the appetite for country houses returning by the spring. Knight Frank house price growth of 3.5% in Yorkshire in 2016, placing the region slightly behind predicted growth across the UK of 4.1%. This might explain why we continue to see demand from buyers from out of Yorkshire. Over a third of our sales here were to buyers from out of the area.”
Edward Hartshorne of Blenkin and Co., York.
“The upper price range in York the conversation is focused firmly on London buyers and 2016 will see this focus intensifying as York continues its ascendancy and appeal to a market that extends far and wide beyond its boundaries. This year, in value terms, over half of all Blenkin & Co sales have gone to London or overseas buyers, and as much as 80% of York townhouses have been sold to St Peter’s School parents.
In 2016 I expect to see further pressure on these statistics as more families move to York, not only from London but also from Harrogate, West Yorkshire and the Midlands primarily to take advantage of the excellent schooling.
In addition we will see a developing trend for cash rich down-sizers to sell their country houses and move into a city that is widely regarded as safe and accessible.
York is the go-to destination but the shortage of stock and in particular the shortage of town houses with gardens and parking will, in 2016, encourage a shift towards the outlying villages, particularly those north and west of York. Next year I expect to see a relaxing of the price differential between city and country.”
Ben Pridden of Savills, York:
“Since the credit crunch we have seen the continued rise of the prime urban markets. “Little Londons” such as York and Harrogate have seen price growth race ahead of their neighbouring villages and rural areas. Although we believe the trend for urban living will continue, villages and rural countryside now represent good value in comparison to larger towns, meaning there is currently a good buying opportunity.
Further down the line, the value gap between the prime urban markets and their rural counterparts will begin to close. We are not sure how the changes in Stamp Duty will effect the market yet. My immediate concerns are for the investment market in York and the strong second home demand we have seen in the National Park, and Yorkshire Coast.
In the short term, there is little doubt that some buy to let investors, and those looking at a second home purchase, will bring forward their planned purchases to beat the April 2016 deadline. I would not be surprised if York price growth cooled in 2016, and I am quietly confident that prime addresses in East Yorkshire will start to pick up.”
Tony Wright of Carter Jonas:
“The credit crunch has permanently changed our relationship with property. A growing number of home owners are now satisfied to keep their heads above water, rather than keep up with the Jones’ leading to a risk-adverse approach. Fewer buyers are moving on a whim as needs overtake wants in the property stakes. People are increasingly buying houses they want to live in and enjoy, not as an investment.
Last year was a fantastic year and 2016 is shaping up to see more of the same. We expect key hot spots in the area, including Harrogate, York and Leeds, to remain competitive as they are the locations of choice for house hunters across the country.
Demand for high quality homes in the right location continues to outstrip supply and the traditional seasonal peaks and troughs are now practically non-existent. The low level of stock creates a unique opportunity for vendors wanting to showcase their property to a captive audience early in the New Year.”
Jonathan Morgan of Morgans City Living, Leeds:
“The city centre market has been starved of new-build activity since 2008 and whilst historically, we have seen around 400 new apartments added each year, recent supply has been at record low levels. The effect of this has been a market operating at almost full occupancy with little genuine choice. Whilst this is great for landlords, it has had the inevitable effect of driving some frustrated renters into other areas.
The good news is that supply is about to return as several new schemes come forward. Of equal significance is that the quality of many of these schemes is very high. Although increased supply can sometimes depress prices, we do not expect this to be the case in Leeds City Centre. A number of areas are likely to see real change, including Hunslet Riverside, where CITU will build significant numbers of Passiv Homes and a new footbridge across to Clarence Dock, and Holbeck, where Tower Works and Iron Works will start on site. City Living is back.”
Patrick McCutcheon of Dacre, Son & Hartley:
“After a very busy 2015, which has further built on the recovery of the last two years, we should expect more of the same this year, with relatively poor levels of supply and continuing competitive interest rates leading to modest price growth. That growth being tempered by world events, on-going austerity measures and the shadow of the Mortgage Market Review.
The MMR is probably one of the most significant influencers of the current market, and yet in many ways seems to be creeping up on potential buyers under their radar. It is certainly having a major influence on the middle market and the ability of buyers in that sector to gear up their financing and make a move up market. Buyers are now having to wait longer and save up more substantial deposits before trading up.
The Governments Northern Powerhouse policy should drive investment in to the region and that can only be a good thing, especially for house sellers within the most desirable areas of the region, including the ever popular Golden Triangle centred on Harrogate, and the more accessible market towns and villages of The Dales.”
Stewart Charnock-Bates of Charnock Bates, Calderdale:
“After a busy 2015 which included housing growth across much of Calderdale,I predict much of the same for 2016. Confidence has certainly returned to the top end of the market as a result of a lack of quality properties coming to the market coupled with a slight relaxation in lending criteria.
For almost the first time since the recession we have a market imbalance where demand exceeds supply. While this will inevitably contribute to a small increase in prices throughout 2016 it will also enable properties of all types in good locations to sell within a reasonable period. In Calderdale, places like Ripponden, Rishworth, Barkisland, Skircoat Green, Lightcliffe and Norwood Green will remain property hotspots as a result of their proximity and easy access to Leeds or Manchester and good local schooling. Other less obvious locations where property growth may happen, due to local investment and improved rail links, are Sowerby Bridge and Todmorden.”
Chris Thomson of Eadon, Lockwood and Riddle, South Yorkshire:
“Last year was busy and we anticipate much of the same for 2016. High demand from buyers combined with relatively limited stock means that there has been a much higher percentage of properties sold for the asking price and above, with improved average sales times. This has created a slight nervousness among sellers, who are wonder whether they will be able to find something to move into when their home is snapped up. The advice of ‘sell first look later’, is not always easy to get across to prospective home movers.
Many of our properties have received numerous bids, resulting in achieved prices of up to 10% above the asking price and we expect this to continue in 2016. There will be the inevitable peaks and troughs, dictated by weather and school holidays etc., but the market is generally far less seasonal than it used to be, with well located, sensibly priced homes attracting buyers, regardless of the time of year. I think we will see a house price increase of 2% to 3% in 2016 in South Yorkshire, We also expect increased activity in the lettings market as many buyers look to find somewhere to call home whilst they look to compete in the busy sales arena.”
Glynis Frew of Hunters Property Group:
“The Northern Powerhouse has been a hot topic in 2015 and one that we feel very passionate about. With offices throughout the country, we now have an accurate picture of national performance and can say with confidence that the north is experiencing a strong property market in both lettings and sales. We have seen this in Yorkshire, Merseyside, Sheffield and Manchester. This is an indication that the economy is thriving in the north and that the Northern Powerhouse effect is really taking shape.
Areas such as York and Leeds are now considered London commuter belt territory as buyers and tenants take advantage of more affordable property prices and good train links to the capital. All these influencers are driving the housing market in these hot spots and we expect to continue to see growth in these regions
“We have experienced an increase in investors looking to put their money in the north this year and expect this to continue in 2016. We anticipate to see an increased level of activity in the first quarter with buy-to-let investors wishing to buy and complete transactions before April when the new, higher stamp duty levy takes effect for this sector.
It is encouraging to see an increase in new housing developments in the region and we welcome the government’s commitment for further new build properties in 2016 and beyond, as shortage of stock has undoubtedly pushed prices up both in sales and in lettings and we still have a real need for more houses.”
Mark Manning of Manning Stainton:
“The last 12 months has seen a surplus of supply turn into an excess of demand within a relatively short space of time. Such a transition has left the shelves pretty bare. Leeds, for example, has just 3500 properties for sale, 30% down on what we would consider the norm and the markets of Harrogate, Wetherby and Wakefield offer much of the same. Against this we have seen a surge of new buyers and tenants register on our database now 12% ahead of the same period last year.
The key to the market, as always, is motivation. For many sellers a move might be desirable but it is often not essential and timescales are flexible. With less to choose from many are also left wondering where there next purchase will be. Most are happy to take a longer term view and wait for the right moment and the right buyer to come into the marketplace at the right price. In 2015 we saw some highly motivated buyers looking to find the right property and with limited supply prices have been pushed higher with a willingness to spend that bit more to secure their next purchase.
For 2016 we anticipate much of the same. The recent change to stamp duty on buy-to-let or second homes, together with the tax relief changes, will create some interesting decisions for landlords. This, together with an increase in new build sites coming online, should add to a predicted increase in supply at the start of 2016 and our estimate is an average 6.5% increase in prices over the next 12 months.”
Martin Ellis, Halifax housing economist:
“A further moderation in house price growth is likely in 2016. House prices nationally rose between 3-5% in Yorkshire in 2015. The prospect of higher interest rates at some point this year and the deterioration in affordability over the past year are expected to be key factors in curbing housing demand. However, demand should be supported by solid economic growth, higher employment, still low mortgage rates and the first gain in real earnings for several years. Further ahead, price growth is expected to rise broadly in line with income growth, as rising interest rates increase the affordability constraint on the market. Higher levels of housebuilding should also limit upward price pressure.”
Brian Carlisle, of Dales estate agency JR Hopper and Co., “Anyone thinking of buying or selling a second home in 2016 should take action now. The Chancellor has added an extra 3% Stamp Duty tax to all second home and buy-to-let transactions which complete after April 1. Buyers are rushing to secure their next properties, before the end of February, to allow solicitors time to transact the deal before the deadline. Sellers need to get their properties on the market or prices reduced to hit that rush. After April, buyers of a £200,000 second home in the Yorkshire Dales will have to pay five times as much stamp duty. They will then either decide not to buy or reduce their offers. Sellers may take property off the market. This could lead to a shortage of good second homes in the spring, which could push prices back up.”