A decade in the York Property Market

Well here we are, a new year and a new decade.  The last year was a particularly turbulent time in the property market as I mentioned quite regularly in some of my other posts.  Did this do anything to quash the York property market?  Well looking at the datasets, the average rent in York is now £786 per calendar month (an 8% hike over the last twelve months).  There were 6% less sales transactions over the last year (3,502 to be precise) indicating a potential lack of confidence in the property market.

In my last article before I broke up for Christmas, I predicted that the BoE base rate will remain at 0.75% for the year ahead as well as York property seeing a capital uplift of 1.8% and I stand by that statement.  However, this article isn’t about predicting what will happen, it’s about looking back over the last ten years and what has happened in the local market.

The graph below shows that as at the turn of 2010, prices stood at £177,666 and Yorkshire and the Humber stood at £130,711.  Fast forward to today and property prices in York now stand at £254,952 (43.50% increase) and Yorkshire and the Humber £159,683 (22.16% increase).  This means capital growth has doubled the rest of its Yorkshire neighbours.

Average Sales Price over 10 years

We know now that York has outperformed the rest of Yorkshire and the Humber as a whole, but which types of York properties have seen the most growth and why?  Well from the table below the trailblazers were clearly your terraced and semi-detached properties.  That’s not to say if you’ve owned a detached home or flat for the last 10 years that you’ve lost out, far from it in fact.

York property type         2010                     2020                     Growth

Detached                            £263,223             £360,281             36.87%

Semi                                    £166,229             £248,057             49.22%

Terraced                             £161,755             £240,948             48.96%

Flat                                      £135,373             £184,784             36.50%

So, what has driven such fantastic appreciation?  Well for one, interest rates have remained at an all time low since 2010 as per the graph below taken from the Bank of England website.  On average rates have stuck at 0.5%.  Why does this matter?  Well with low interest rates and increasing competition from lenders, borrowing on mortgages remains very compelling.

BoE-Database_export

Coupled with a lack of homes being built and less homes on the market today than 10 years ago, it’s unsurprising that prices have risen so exponentially.

Well what about the rental market?  Despite inflation having an impact on rents, rising property prices will also have a knock-on effect as more consumers are now having to rent which creates demand and supply pressure, but by just how much? From the table below, according to Dataloft Rental Market research, average rents have seen the greatest growth in detached homes.

York                      Oct 2014             Oct 2019             Growth

Detached             £976                     £1,197                  22.64%

Semi                     £768                     £896                     16.67%

Terraced              £761                     £826                     8.54%

Flat                       £643                     £719                     11.81%

 

I would envisage this again has something to do with demand and supply pressure on the market.  For instance, a quick Rightmove search now tells me that there are currently being marketed, 138 flats, 150 terraced houses, 50 demi-detached homes and only 20 detached homes in the greater York area.  Detached properties are already a highly demanded type of tenure and with proportionately less of this stock, it can only mean a sharper rise in price.

Average monthly rents by property type - Oct 2019

Does this mean that landlords who own detached homes have won over landlords with other property prices?  Well not necessarily.  Using the above figures for comparison, the average yield on a detached home is now 3.99% whereas your flats yield at around 4.67%, terraced houses 4.11%, semi-detached homes 4.33%.  Therefore, despite rents for detached homes rising the most, they, depending on your outlook, perform as the worst type of buy to let investments in York.

I will reiterate that the York property market has performed very well over the last year and I am very excited as we move further into the next decade, to see how things transpire.


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