New research launched by Savills this week reveals that property price growth in York has significantly outperformed the rest of Yorkshire and the north of England since the credit crunch, and buyers from outside the region are moving to the area from all over the UK.
In the prime housing markets, average values are now 13.4% above their 2007 peak, compared to values of -18.8% below this level on average as you move outside York to the surrounding villages and countryside.
Sophie Chick from Savills residential research team, says: “The strong growth in York city centre highlights a continuing trend seen across the UK. Attractive towns and cities that are well connected, have a core of good quality family housing and a choice of high performing schools have become the focus of a widening profile of affluent buyers. York ticks all these boxes and more.
“Buyers moving from the capital still play an important role as we see the ripple effect continue. In some cases, the London commuter belt reaches as far as York, with 24% of buyers of prime property in York and 7% of buyers in the surrounding villages working in London, although often just three days a week. This comes as buyers recognise the very large value advantage”.
In the 15 months to March 2016, the average sale price across York, which includes the city but stretches from Strensall in the north to Copmanthorpe in the south, was £243,000*. This is 43% higher than the regional average of £170,000 for Yorkshire and the Humber.
The most expensive areas are the wards of Derwent to the east of the city, which covers the village of Dunnington, and Rural West York, containing Upper Nether Poppleton, which saw average sale prices of £322,000 and £312,000 respectively.
Across North Yorkshire, the average sale price was £217,000. High value locations include Harrogate and the Howardian Hills, the latter of which had an average sale price of just under £360,000, two thirds higher than the county average.
On the coast, the highest value village is Scalby, which had an average sale price of £238,000.
Ben Pridden, head of residential at Savills York, comments: “It is extraordinary how resilient the prime York market has been, particularly the growth in property values which have significantly outperformed prime villages surrounding the city. It is incredibly encouraging however, to finally see signs that the price gap between country and city is beginning to close.”
Sophie adds: “Prime property values across the north of England are forecast to rise by an average of 18.2% over the five years to 2020, as the local economies strengthen and buyers become more aware of the comparative value this region offers”.
An event was held at Merchants Adventurers Hall in York on Thursday 19 May to launch the latest residential research document, titled: Spotlight: Savills York and Darlington Residential Offices. The event also included an update on Yorkshire’s development and rural land markets and a closer look at the county’s commercial sector.
Click here to view the full Savills Spotlight: Savills York and Darlington Residential Offices research report.
Farm agency update
Andrew Black, director in the farm agency team based in York, comments: “We are expecting land values across Yorkshire to decrease by up to 10% over the next three years due to reduced profitability in farming, but we then expect to see prices recover by approximately 5% during the following two years to 2020. We anticipate that arable land on the Yorkshire Wolds will remain strong despite this average trend.
“As ever, competitive interest will determine the overall sale price for land and farms, both within the county and further afield”.
Development update
Matthew Jones, director in the Leeds development team, comments: “When considering the Yorkshire market overall, land values are generally still below 2007 and we can still see areas in the county where they are some 60-70% below their 2007 peak. To sustain the market, we need to pull through more planning permissions and the local plan process and strategic land market is vital to keep the land supply coming through the system.
“It is all about location at present and in pockets of Yorkshire, the residential land market is strong with land values increasing in a controlled manner. Locations including York City Centre, North West Leeds, East Riding Market Towns, West Hull and North Yorkshire market towns stand out as housing land hotspots, with the land market reigniting in both Leeds City Centre and the district of Harrogate.”
Commercial property update
Clare Bailey, associate director in the commercial research team at Savills, comments: “Yorkshire’s office investment market is thriving, with transaction volumes reaching more than £347 million in Leeds last year and £106 million elsewhere in the region. Looking ahead, Yorkshire’s economy is forecast to grow by 23.5% over the next 10 years and this could create up to 54,000 more office-based jobs, in turn driving a requirement for an additional five million sq ft of office space.
“Speculative development will therefore be vital, as Leeds currently has less than one year’s supply of space left at average annual take up despite the 556,000 sq ft due to be delivered at schemes including 6 Wellington Place and Central Square this year. Supply constraints combined with an increase in ‘northshoring’, as firms looks outside of London in search of lower property and staff costs, will also drive rental growth across Yorkshire’s big cities.”
