Yorkshire Market Review September - 17/09/19
While we wait for the lunatics running the asylum to sort themselves out in Westminster, the local market continues to be more resilient than most people would have thought. However the never ending housing reports that leak into the market give a more depressing picture nationwide and we feel both buyers and sellers need to be aware of these factors as long term confidence remains low. However rental demand is high and stock levels low, which gives cause for optimism for landlords as rents should start rising.
Rightmove’s latest House Price Index suggests that the price of property coming to market has fallen by 0.2% (-£730) this month, the first fall at this time of year since 2010 and there is no sign of an ‘autumn bounce’ yet. This is probably due to heightened political uncertainty causing some to hesitate, but conversely it gives a better negotiating opportunity to autumn buyers who can keep their nerve.
Additionally, Rightmove reports the number of sales agreed is down in all regions compared to a year ago, with the 5.5% drop a marked reversal from the +6.1% sales agreed that they reported a month ago. The number of properties coming to market is also down by 7.8% this month compared to the same period a year ago, again with all regions down on the prior year.
The annual rate of price increase has dropped to just 0.2% but this is buoyed by the north as buyer affordability and investor activity create and maintain market momentum, factors that are lacking in parts of the south. The average house prices in Yorkshire & Humber is £196,360 up 3.2 % this year with the average time to sell being 61 days (London is £603,883, -2.1% and 69 days to sell respectively).
This is good news for local sellers however we do agree with Miles Shipside of Rightmove who suggests that whilst buying activity is still at nearly 95% of what it was a year ago, sellers in all regions are seeing fewer sales go through, so should be more willing to negotiate with prospective buyers if they want or need to get a deal done. Sales progression times are also getting longer and we advise all sellers to be careful when deciding which conveyancing firm they use as some are painfully slow.
The latest RICS UK Residential Market Survey also suggests some positivity has leaked out of the market, and August also saw flat demand from new buyers, after a couple of months where enquiries from potential purchasers had increased. However we feel the usual factors that create positive demand are still relevant, namely access to quality schools, amenities and transport links and houses in areas that offer these are still very desirable with values holding up well.
In the lettings market, the August results show tenant demand increased for an eighth month in succession. With landlord instructions remaining in decline, an ongoing trend stretching all the way back to 2016, the consistent imbalance between rising demand and falling supply may see rents being squeezed higher over the next three months.
We have seen this trend mirrored in our area, so it you are thinking of renting a house it may be wise to do it now before rents possibly go up and the number of rental houses gets smaller. Obviously if you are a landlord, now is a great time to rent out your house. The initial fear that the abolition of tenant fees would create chaos with tenants applying for numerous houses at the same time, has thankfully not happened to any great degree at Robert Watts and we still have plentiful numbers of long term tenants wanting quality houses.