People with an interest in property will be aware of the extraordinary market we have experienced over the last two years. According to the Land Registry the average house price in the North Yorkshire rose by 17.3% for the two years to March 2022 – in monetary terms that is a£46,800. Most commentators forecasted a drop in values of 5% to 10% by the end of 2020 coming out of the first Covid lockdown.
Much of the recent market activity has been driven by a disparity between supply and demand. According to 20Ci, a residential property analyst, “aside from Inner London, the whole of England and Wales, at a regional level, had just under two months’ worth of property stock left to sell at the end of Q1 2022 and overall, the available months of stock are down by almost half on historical norms.” This is against Rightmove’s March report stating that, “there are now more than twice as many buyers as sellers active in the market, which is the biggest mismatch between supply and demand that we have ever recorded at this time of year.”
Extraordinarily low interest rates further contributed to the strength of the market. This is changing fast, with successive rate rises reaching 1% in response to rising inflation, currently running at 9%, a 40 year high.
Whilst there doesn’t seem to be much sign of the imbalance of supply and demand ending, the pressure on households’ finances and the rising cost of borrowing must result in a slowing of the market. The question is, will prices come back and will buyers speculatively wait until this happen? We believe it is too soon to call, much depends on at what point interest rates plateau, and whether inflation continues into to double figures before subsiding to a more manageable level.
“For the time being it remains a sellers’ market, with a majority of our recent sales selling for over guide in days from launch. Anecdotally there are signs things are steadying, and I believe prices have reached their peak. The prime market in Yorkshire is likely to hold its value despite the economic turbulence, as it is less reliant on debt. The level of country houses at the top end of the market in North Yorkshire is not untypical of “normal times”, so the imbalance of houses available to buy and people looking for a sizeable home, is not likely to change any time soon.”