What happened in the York Property Market in 2019?

It’s always around this time of the year as we start to wind down towards Christmas where I find myself reflecting on what’s happened over the last year, specifically, whether I’ve accomplished all or most of what I set out to achieve at the start of the year.

I also like to see what’s happened in the York property market this year as well as set up expectations of what will happen in 2020.

Well, York properties have achieved an average sales price of £254,703 over the past 12 months.  This has seen a 2% uplift from the previous 12 months.  I’m confident this rise is down to the number of sales transactions in York falling by 6% (3,452 sales over the last year) but let’s not forget other factors which may have contributed to this.  For example, the Bank of England base rate has remained at 0.75%, despite rising property prices, it’s still a very competitive time to have a mortgage whether it be for buy to let or as an owner occupier.

York Average prices by property type

15% of sales in the past 12 months were flats, achieving an average sales price of £180,264. Houses achieved an average price of £270,995. The total value of sales in York amounted to £901,902,000.

The highest value recorded by the Land Registry over the past 12 months was £825,000 for a flat and £2,500,000 for a house.  So, what has happened to property prices by property type?  Well over the last 12 months Terraced, Semi-detached and Detached York homes saw a capital growth of 1.90%, 1.55% & 1.71% respectively whereas flats on average saw a decline in prices of 0.55%.

York Annual Change in Price

So, what’s been happening in the York private rental market?  Well over the last 12 months, the average rent achieved for properties let in York was £785 per month. This is a staggering 8% change on the previous 12-month period.  I would expect this is largely down to a number of landlords exiting the sector as the government are making it less profitable to be a landlord.  This lack of quality rental stock will, similar to properties for sale, create a lack of supply and consequently mean more tenants looking for less property inflating rents.

39.7% of properties let in the past 12 months were flats, achieving an average rental value of £747 per month. Houses achieved an average rent of £823 per month, detached achieving £1,094pcm, semi’s £825pcm and terraced houses £786pcm.

Average monthly rents by property type

Whilst a majority of properties let over the last 12 months were flats, this was closely followed by terraced houses which constituted 38.7% of the York private rental market, followed by 15.5% of properties let being semi-detached properties and finally only 6.1% of York rental properties being detached houses.

Profile of properties let (1)

In terms of Age Profile of tenants, nearly 61% of tenants were of the ages of 18-29 and, inevitably, as age ranges increased, proportions decreased.  Invariably the older generations, in a majority of cases, own their own properties rather than rent.

Age profile of tenants

Whilst considering all the above, what are my expectations of what will happen in 2020?

Well with the 2019 general election finally passed us, we can now turn our attentions towards Brexit which I am conscious may have some impact on York property prices.  Given the economic uncertainty that will follow, I expect the Bank of England base rate will remain at 0.75% for the year ahead to keep the economy stabilised and encourage consumers to keep spending, great news for mortgagees.

While I believe property price growth will start to cool in York, I still expect prices to rise by approximately 1.8%.  As the final part of Section 24 comes into effect meaning from April 2020, mortgage interest relief on taxable income will be reduced to 0% and will be replaced by tax credit of 20%, I expect we may see more landlords selling off their portfolios.

Of those landlords who remain in the sector, I would expect the savvy ones to buy any new properties under investment vehicles such as limited companies to mitigate the effects Section 24 will have on their profitability.  Furthermore, whilst mortgage rates for limited companies are generally higher than for individual landlords, I expect more mortgage lenders to expand into lending for limited companies.  This will create an element of competition between lenders and should hopefully reduce rates on limited company lending.

Lastly, I expect rents to rise due to the slow but steady reduction in rental stock and with the impact of the June 2019 Tenant Fees bill prohibiting Landlords and Agents being able to charge Tenant Fees.

Let’s review this article next year and see what happens but in the meantime, whatever your property goals are for 2020, if there is anything, I can do to help you achieve them, please get in touch.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s