Following my Brexit article last week and its impact on the York Property Market, I was interested in going into greater detail as to what has happened according to the various Index reports, namely Halifax, Nationwide, RICS and Land Registry. It has made for some interesting reading, especially when you consider my previous Insights episode which showed only modest growth on both a national and local scale.
What I find fascinating is how two indexes can have varying statistics on property prices across our nation. To explain, Halifax reported annual house price growth of 2.8%, the average UK house standing at £236,800. Nationwide tells a different story, 0.4% annual growth with the average UK house setting you back approximately £211,300.
In this time of uncertainty, it’s positive that property prices are still on the rise for homeowners but question, are increasing property prices racing away from First Time Buyers? From the graph below taken from the Nationwide Index (data provided by MHCLG), percentage of home ownership appears to be on the rise. It is certainly higher than it was in 1984, when the Bank of England base rate was at 9.5%.
The drivers for this steady rise in property prices could be as a result of demand and supply pressures which is undoubtedly exacerbated by Brexit artificially inflating prices. What I mean by this is, with the current level of economic uncertainty, property owners would rather hold out and wait to see what happens. This creates a sellers’ market as the demand intensifies for an even lesser supply of housing stock.
Still on the Brexit topic and its impact on the property market, the latest RICS housing index provided some particularly interesting findings. Of all candidates surveyed, 77% of respondents pointed out that they felt the main challenge for the housing market was, by far, down to Brexit over other reasons, the second being lack of housing stock.
What is interesting about the above is the top three challenges are inter-related. The level of Brexit uncertainty will result in significantly less homeowners putting their property on the market, which will mean property prices rise making it harder for individuals to get on the property ladder.
So where does the York property market stand in all of this? Well according to Land Registry data, York property prices have risen by 5.54% on average over the last 12 months. In monetary terms, the average property will now sell for approximately £254.600. I’m sure that you are getting quite bored of me saying that York property outperforms the UK but I am passionately an advocate of the fantastic fundamentals York has to offer. It may be of interest to know that if you own a property in York, on average, it has made you approximately £1,113.25 per month over the last year. With the average salary in York (as at July 2018) at £24,100 per annum, York homeowners, have generated them an extra 55.43% extra on top of their salaries which really emphasis the power of passive income and property investment for wealth generation.
From what I’ve seen more recently and from speaking with a number of landlords and property owners in the local York property market, their thoughts are to hold out and see what happens with Brexit. That is fine for some, but I’ve always advocated taking the contrarian approach and to do the entire opposite of what the tabloids are telling you, what others are doing and work against the grain, ‘fortune favours the brave’ after all.
As the number of properties for sale in the York property market is at a historic low, you have less competition for selling your home meaning a possible higher price. It’s when the media hysteria and uncertainty clears, that’s most likely when the increasing level of sales stock create less opportunities for sellers. Bear in mind, if you are upsizing, this will have the same impact on your next purchase of course. In any event, now is as good a time as any (if not, arguably better) to get your property on the market for sale.
If you’re interested in selling your property but have concerns, give me a call and let me see if I can help offer some assurance.