August 2018 was an interesting month in the UK property market. According to the Halifax House Price Index, properties across the board, increased in value by 3.7% to £229,958. Interestingly, the Nationwide House Price index for August 2018, recorded only a 2% increase from this time last year with property prices averaging £214,745. Nevertheless, both indexes report on steady growth in the UK property market which is great news for owner occupiers and investors alike but perhaps problematic for first time buyers trying to get their foot on the property ladder.
We will have to see what the government’s plans are regarding Help to Buy come March 2021 but from the graph above, taken from the Ministry of Housing, Communities and Local Government, there has been a steady rise in its use in the FTB market.
From the graph above (taken from the RICS August 2018 house price index), we can see that in Yorkshire and the Humber, there has been an increase in new buyer enquiries on a three monthly average of around 13%. In the same time frame, from the graph below (again from the RICS August 2018 index) showing vendor instructions, the number of property owners instructing sales has reduced by around 3%. This could be indicative of two things, either we are moving more and more towards a seller’s market with an increasing demand meeting a limited supply, but more likely, the impact of seasonality has taken hold (the holiday period slowing down the market).
Needless to say, the RICS index could indicate that now is a good time to put your property on the market for sale given the increase in new buyer enquiries. For those buyers who are able to raise the money for a deposit, York has the added benefit of capital appreciation based on passed trends making York property a fantastic investment, whether it be as a landlord or owner/occupier.
More locally, according to the Land Registry, properties in York, at the end of July 2018, had an average value of £249,086, outperforming the UK as a whole (by 8.32% according to the Halifax index and 16% according to the Nationwide index), again great news for anyone who owns a property in York.
The greatest percentage rise in capital growth in York over the last year was in detached houses which rose by 1.66%, and flats had actually decreased in value by 2.25% year-on-year. Does this mean that detached houses are the way forwards and one should pull their money out of York flats and apartments? Not necessarily. The data from Land Registry also alluded to a slight decline in first time buyers and a slight increase year-on-year in second time buyers (the impact from up-sizers).
Furthermore, it is worth noting that twelve months ago, York flats actually outperformed York detached houses in terms of capital growth by 1.54%, making any divergence in varying property types, transient at best.
Lastly, there’s an argument to say that landlord investors are more likely to put their money into flats over detached houses in York as the yields will arguably be stronger. With the cooling in the buy to let sector from government intervention over the last few years, more landlords will have put their properties on the market for sale.
All the above could create an artificial increase in supply of flat stock which will create a buyers market in the York flats and apartments sector, thereby reducing price of flats accordingly.
If you’re at all interested in talking about the York property market, or are looking to invest in the area, please do feel free to pop into our Gillygate office and I would be delighted to see how I can help. Just give me a heads up as to how you take your tea or coffee and I will get the kettle going!