Early Summer sees the release of The North Yorkshire House Price Index, compiled by The Search Partnership. For the last five years we have been analysing the average price paid per square foot as recorded by the Land Registry throughout six key areas in our region. These areas are Thirsk, Ripon, Boroughbridge, Harrogate, Wetherby and Bedale. The research applies to detached house sales only.
There are many house price indices published across the country but The Search Partnership House Price Index is the only research that is specific to these 6 key areas of North Yorkshire. The Index tracks actual prices paid in 2019, rather than guide prices or advertised prices, so it is a very accurate barometer for those local markets as well as a great way to pinpoint how specific locations are performing. The index number is the average pounds per “gross internal” square foot that a detached house sells for so if a homeowner knows, or can work out the square footage of their house, this is also an easy way to give a useful arithmetic guide on what a house is likely to be worth. It should be stressed that it is a guide and does not take into account the individual characteristics of the property such as condition, setting and plot size for example.
Before looking at the impact of Covid-19 and our outlook for the remainder of 2020 we must first refect on 2019. In the spring of 2019 we predicted zero growth for remainder of the year but are happy to confirm that this was not actually the case. You will remember that at the start of 2019 Brexit was dominating the headlines and the housing market was severely lacking in confidence. Despite this, and the election looming in December 2019, we are pleased to advise that the average house price paid across our region actually rose by 2.1% in 2019. Taking into account the issues that faced the economy, this is certainly a surprising result and demonstrates once again that prices in North Yorkshire are resilient to nationwide economic pressures and uncertainty.
For the first time, the average price per square foot across North Yorkshire exceeded £300 which is a significant milestone. Prices in the prime areas of Harrogate are now averaging £430, the highest average price in the region. The areas surrounding Bedale, Ripon and Harrogate have shown a small increase on the house price index while the areas surrounding Thirsk and Wetherby have shown a small decline. The average price paid around Boroughbridge has performed most strongly in 2019, showing a 12% increase over the period.
Covid-19 and the future.
At the time of writing, the housing market has been facing one of the most challenging periods in history. With zero viewings, as a result of the enforced lockdown, for the majority of Q2 we have seen the lowest spring transaction levels on record.
In order to be sure where the market will be for the remainder of 2020 and into 2021 we must remember the state of the market in Q1, just prior to lockdown; a comparatively stable political backdrop with a huge Government majority, financial markets in relative calm and continuing low interest rates. These are the 3 key ingredients for a thriving market. In the 4 weeks since lockdown restrictions were eased it would appear that the market in Yorkshire and the north of England is making up for the lost time in Q2 with significant levels of activity across all sectors.
We believe prices, for now, are holding firm and will continue to do so through Q3 and into the start of Q4. We’re cautiously optimistic about the short term but do have concerns and are less dogmatic in our assesments for the medium term market across the country as a whole as we move into the back end of the year and into early 2021. This is when the full effect of the pandemic will be felt as the variety of Government back schemes draw to a close. Will levels of unemployment have been kept under control? Will the financial markets have continued to recover the losses in Q2? Will the banks be willing to lend again on competitive terms? We will only know the answer to these questions in the fullness of time but if the answer to all three is “Yes” then we have every reason to be optimistic about the general health of our market in both the short and medium term.