The UK remains a fantastic location for investors, due to the combination of a stable economy and continued and increasing demand for property. Though the market remains buoyant and full of opportunity across many regions, some cities are clear standouts and York has firmly earned such a title.
In the first of our series of three key reasons to invest in the historical city of York, we focus on the impressive track record of capital growth and the strong potential for further appreciation.
York property prices now 8.2% higher than 2007 peak
During the 11 months between January and November 2015, the Land Registry saw house prices in York increase at a rate nearly 50% greater than the average found across England and Wales. Sales of prime property in York hit a 20-year high this summer and house values in the city are now a resounding 8.2% higher than their previous peak in 2007, and look to continue increasing throughout 2016.
A recent survey revealed that there are now over 3,000 properties worth over £1 million in the Yorkshire region, a 22% annual increase. These indicators suggest that the prime housing market has benefitted from an improvement in buyer sentiment since 2013.
Future property demand assured
The city has all the tools available to become an economic hub on a national scale and beyond. The City of York council’s successful Enterprise Zone bid was announced in the Autumn Statement, as George Osborne listed York Central as one of the 26 new zones nationwide. York, already with exceptional rail links and connectivity to major cities such as London, Manchester and Edinburgh, could see the Enterprise Zone unlock investment in the hundreds of millions for the city.
Located next to York Rail Station, the enterprise will focus on rail, engineering and professional services, and in turn extend the central business district of the city, attracting professionals from across the country. As York’s economy gathers speed and begins to reach its potential with further government backing and development, house prices are expected to continue their rise as professional opportunities in York compete with other cities and regions, making the city an attractive location for a qualified and ambitious workforce.
With housing stock limited, demand for property up 56% in 2015
Renowned as a place of beauty and historical reverence, York boasts a quality of life and scenic nature that has led it to the third fastest growing population in the UK. Not only has the scenery and value led to increasing demand, but as an English heritage city, York has a restricted construction pipeline – prolonging new builds or even scuppering developments before they begin.
With the York property market exceptionally buoyant, including a 56% increase on demand in 2015 alone and property viewings up by 13.4%, supply simply cannot keep up. The city saw an influx of residents between 2001 and 2011, which caused the population to rise 9.2% to 189,000, and with housing stock historically rising as little as 0.3% each year, the supply-demand imbalance looks set to continue in York for some time to come.
An affordable location for a historical and high quality of life
Despite York house prices continuing to increase, there is still plenty of value to be found, especially in comparison to the capital. The average price per sq ft in York was £209 last year, well under half of the £500 per sq ft in London. With 17% of buyers in York relocating from London, choosing to enter a property market that is far more accessible allows investors larger homes for their money.
Only a two-hour train journey from London, York is a feasible destination for part-time commuters. It isn’t only the cost effective element of the city that is attracting investors and tenants away from the capital, but the cultural and educational qualities the city offers. The Jorvik Viking Centre museum attracts some of York’s 7 million annual visitors, along with the towering splendour of York Minster.
With an exceptionally slow construction pipeline and limited available space for further developments, York property is well placed to hold its value and, with supply struggling to keep up with demand for the foreseeable future, enter an impressive growth curve as we enter 2016.
We will take an in-depth look at the second reason to invest in York – growing rental demand and the strong yields that come along with it.
