Are York property prices spiralling out of control?

Yes, I am aware just how much I sound like a broken record when I harp on endlessly about how property prices in York have risen exponentially and continue to do so.  In part, it comes down to simple Economics which drives property prices.  Property, being a limited commodity, as supply of housing stock grows slower than the York population, this is only likely to result in a further upward trajectory on property prices – more on that later.

I’ve raised on a couple of occasions in previous articles the Brexit debate and agree the uncertainty which it brings can be impactful on the economy and by extension, the York property market.

However, we as a nation have been aware of the impending vote to leave the EU since the Summer of 2016 and this has not seemingly quashed the York property market or had a negative impact on property prices, quite the opposite in fact.  One could argue that the rise in prices could be a short-term blip, driven by fewer sellers putting their properties on the market in a ‘wait and see’ approach.

Let’s look at the numbers.  The below table shows the average property price each year, the number of transactions in York per year since 2007 as well as how many properties in York were sold on average each month in these consecutive years.

Table

Total properties sold graph

 

Prior to the recession in 2008, a tremendous 4,134 properties exchanged hands.  Since this point, not once have we got close to hitting that number.  However, York property prices have continued to grow year on year and there is little correlation between prices and total number of property transactions, even in the midst of our awareness of the impending exit from the EU. This arguably dispels any myth that Brexit is causing any inflation of prices in the York property market.

Whilst it is exciting to work in a city where property prices have consistently been on the rise, being somewhat of a sceptic, I must raise the question, “Are York property prices spiralling out of control?”

You may have seen me mention in my last article how property prices, as per the Land Registry March 2019 data, stood at £251,507 and reverting back to the supply and demand debate, it would appear that we are still not building enough homes to satisfy the number of births in the city.  As per the Office of National Statistics, an average of 593 homes have been built each year since 2012 and with an average of 2041 births per year (ergo 1 house for every 4 individuals), you don’t need to be an economist to deduce what will happen to property prices in the long-term.

Chosen house

Furthermore, ONS data revealed that the York population is approximately 208,200 meaning that the price of property in York exceeds the population by a factor £1.21 to 1.

Despite Brexit and/or decisions as to whom they appoint as their new political leader, the government really need to take a hard look at the Housing Sector and implement achievable goals rather than promising the unobtainable simply to get more votes as this will, based on the above data, only seek to exacerbate an already inflated property market.


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