Member Article

The future for Yorkshire's housing market looks bright, according to Knight frank

Yorkshire and Humberside was one of the poorest performing UK regions with no growth in average house prices during the past three months, according to recent statistics.

But, argues Tom Storrar of global property consultancy Knight Frank in Leeds, it is important to consider the sub-regional analysis.

Mr Storrar, an associate in the residential and commercial valuation team at Knight Frank, commented: “For example, whilst average house prices in the Yorkshire and Humberside region showed 0% growth, York, Leeds and Sheffield saw prices rise 7%, 6% and 5% respectively over the same period. The average figures were held back by slower growth in West Yorkshire (-2%), South Yorkshire (0%) and Bradford (0%).”

The Knight Frank/Markit House Price Sentiment Index suggests a positive outlook for future price growth over the next 12 months. This is based on a current view of house price sentiment rather than historic evidence from transactions or mortgage market evidence and has been a clear indicator for house price trends. In addition, some 6.5% of UK households said they planned to buy a property in the next 12 months, up from 5.7% in March.

Mr Storrar said “There are some key factors underpinning house prices at present. Confidence in the economy continues to grow while the cost of living has stopped rising.

“Mortgage rates have dipped to a new low, making owning a home – for those who can clinch a mortgage deal – cheaper than at any time before. The cost of buying a home for the majority of purchasers has also fallen after the reform of stamp duty in December last year. A lack of supply of homes for sale in recent months has also boosted prices.

“There are still headwinds in the market, not least the hurdles facing first time buyers to climb onto the property ladder with affordability levels still high in some areas of the country, but the sentiment index suggests that households are looking to the summer with the expectation that house prices will be moving upwards”.

He added: “Knight Frank’s Yorkshire residential valuation team continues to enjoy a busy start to the new financial year. Two recent notable instructions in secondary Yorkshire towns and cities suggest a relatively new trend of individual studios/apartments or small lots within larger residential blocks being marketed and sold to overseas (predominantly Asian and Middle-Eastern) investors rather than to the domestic owner-occupier and investor market.

“This model also goes against the recent build-to-rent trend so it will be interesting to see whether or not this activity gains momentum in the coming months.”

This was posted in Bdaily's Members' News section by Robert Beaumont .