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PROPERTYdrum Pulse: York

publication date: Jun 11, 2009
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YorkYork is a beautiful riverside city in North Yorkshire. With Harrogate and Leeds, the city forms the ‘Golden Triangle’ of Yorkshire and is unique, historically vibrant and cultured. A compact city of tangled quaint cobbled streets, winding alleyways, grand public buildings and exquisite architecture, York’s medieval walled city centre, dominated by the iconic medieval York Minster cathedral, is popular with visitors and shoppers alike. The historic core of the city is a major tourist destination in itself. Beating Bath, Edinburgh and London, York was bestowed the honour of being voted the UK’s favourite destination in the Daily Telegraph’s Travel Awards 2008.

The city was founded in AD 71 and became in turn the capital of a Roman province and of the kingdoms of Northumbria and Jorvik. York lies within the Vale of York, a flat area of arable land bordered by the Pennines, North York Moors and Wolds, at the confluence of the Rivers Ouse and Foss on a terminal moraine left by the last Ice Age. The city is prone to flooding from the River Ouse limiting development and has an extensive (but not always effective) network of flood defences. These include walls along the Ouse, and a barrier across the River Foss where it joins the Ouse.


York Property Market overview
Summary of Properties for Sale in York (8th May 2009)
Total properties for sale in York: 1,372
Properties for sale in York listed in the last 14 days: 73
Average price of properties for sale in York: £233,675
Median price: £187,000
Average Time on Market (ToM): 202 days


Social History Lesson

York is a city steeped in history dating back to the pre-Viking days. The City Walls (the best preserved in the UK) date back to Roman times, of which substantial fragments of these still remain, but it is the medieval walls, carefully maintained and restored, which now encircle the old city, almost three miles round and today planted extensively with daffodils. York Minister, York’s major church dating from the 7th Century, is the largest medieval structure in the UK with 128 stained glass windows. Its grandeur and its beauty attract visitors from all over the world. The Shambles is a half-timbered medieval maze and there are fine bridges over the River Ouse. Castle Howard, one of Sir John Vanbrugh’s finest achievements, and the setting for the 1981 TV serial Brideshead Revisited, is 15 miles north.

Other major tourist attractions include York Castle Museum, the Jorvik Viking Centre and the National Railway Museum. Home to a population of approximately 181,000 people, York has a slightly higher elderly population than the national average. The city’s varied demographic provides a blend of young families, students, retired people and young professionals. York’s local economy, once dominated by the chocolate and railway industries is now widely diversified and is based largely on tourism, science and service-based industries. Most of the industry around the railway has gone, including the carriage works which once employed some 22,000 men. Only the Nestlé Rowntree factory remains. Unemployment is low at 1.9 per cent.

According to the Inward Investment Board, “York is home to 2,500 life scientists and some 40 bioscience and healthcare companies. 130 information and communications technology companies operate in the city. The labour pool is regularly topped up by the University of York, which produces 200 electronics and computer science graduates a year.” The University of York and York St John and its science parks have attracted bio medical and IT companies to the city. One of York’s jewels in its crown is that it is one of the UK’s 8 ‘science cities’ attracting inward investment.


York stats


York stats


Accessibility

York has been a major railway centre since the beginning of the railway age, with the first line arriving in 1839. For many years the city hosted the headquarters and works of the North Eastern Railway. The city is the major regional centre of North Yorkshire with excellent rail links on the East Coast line and regular services to London in less than two hours. The A64 dual carriageway connects York to the A1/M1 motorways and the city’s closest airports are Manchester Airport and Leeds-Bradford Airport. Since the historic core of the city dates from medieval times it is not suitable for modern traffic. As a consequence much of the area inside the city walls is either car free or traffic is heavily restricted and residents and visitors are encouraged to use the park and ride services available. There is easy access from York to the unspoilt scenic splendours of the area including the North York Moors National Park, Yorkshire Dales and the coast.


York bridgeQualtiy of Life - Charming

York, a bustling, lively city with plenty of sophisticated residents and students, is a cosmopolitan and friendly city, with good shops, lots of charm and a good night scene for the younger residents. It is one of the most visited cities in Europe – with visitors and residents enjoying the pleasures of either wandering around the small city centre, taking a trip out to some of the beautiful countryside within easy reach of the city, or a day out at the races. Later than many other provincial cities, York has discovered luxury city-centre flats and the joys of living and drinking on the riverside.

“The Rivers Ouse and Foss flowing through its centre provides a valuable amenity for residents and visitors alike,” says Nicholas Alliott of The Property Company, a letting agency specialising in the investment residential market. “The Minster stands majestic in the city centre and the historic City walls and Bars create a wonderful atmosphere.”

Ben Pridden, Head of Residential Sales in Savills York office says, “People buy in York for many good reasons including its great beauty, historic interest, rail links to London and excellent schools. We sell to people who come for the racing, want to retire to York from the south, would rather commute to Leeds and further afield and live here – and despite the current market, want a second home in this great city.”

York is also noted for its wealth of churches and pubs. Many of the remaining churches in York are from the medieval period. It is said that York contains one pub for every day of the year, and that there is no point within the city walls where one can stand and not be able to see at least one pub and at least one church.Tadcaster is just down the road, home to both John and Sam Smiths breweries. York has two main theatres, the Theatre Royal and the Grand Opera House offering musicals, comedy, bands and touring productions. It also has many amateur companies, and is home to the Riding Lights Theatre Company. Parliament Street can be lively at times with street fairs and various forms of entertainment. King’s Square has some very good juggling acts and classical string performances. The famous Betty’s Tea Rooms is a traditional favourite.


York ShoppingShopping

York’s city centre is very compact and ‘down town’ York can easily be walked within 15 minutes. It has first-class shopping facilities but, as in most large towns and cities, many shops have been moving to the out-of-town shopping malls and centres such as Clifton Moor and Monks Cross. However there are still many high street multiples in or near the city centre, the main shopping street being in the Coney Street area and at The Coppergate Centre, which includes the Jorvik Viking Centre. Tourist shops are plentiful, although some of them seem to have a fairly short life. Good tourist shopping streets are The Shambles, High and Low Petergate and Stonegate. York boasts the brightest and arguably the best daily open market in the North. Newgate Market has 120 stalls in a market square within Europe’s largest single pedestrianised area situated between The Shambles and Parliament Street.


Downside

Too touristy (approximately 4 million visit York each year – York residents moan about the city centre being turned into a ‘visitors’ museum’), and can be considered provincial compared with its racy neighbours Newcastle and Leeds. Another problem is traffic congestion in the city centre and on the A64 bypass.


York cafe riverProperty - Signs of Activity

A major aspect in York’s favour is its central location and unlike many areas in the UK affected by the property downturn, the effects of the slump and the suggestions of a full-scale recession have been less severe. Although property prices have fallen in York, they appear to have fallen less and York can still be regarded as a ‘safe’ investment for property. In research undertaken for The Sunday Times last year, Knight Frank pinpointed the top 20 fail-safe investment towns in the UK, taking into account factors such as the affordability of housing, wages and unemployment in the area, population growth and how qualified the locals are. York featured number two on the list, as it had many of these things going for it: an attractive, historic town centre, good links to London and a relatively small supply of housing stock in heart of the city. Added to that is the ease with which you can reach other nearby towns and cities where people might like to work, but not necessarily live, such as Leeds.

Also, in addition to creating a solid market for student lets, the two universities have affected the property market in York. “It has had a significant impact over the years. A science park came here on the back of it, with tenants such as Smith & Nephew,” said Mr Jaram of sales and letting agents Carter Jonas.

House prices in York have fallen over the last 18 months in line with the national average (Coalters Estate and Letting Agents reported about a 20 per cent fall in York). However, e.surv Chartered Surveyors report that sales in Yorkshire have increased month on month for the first time in a year and that mortgages also have been approved at an increased level for the first time in a long time. The company believes that York, in keeping with the rest of the country, may be experiencing the bottom of the cycle although another quarter’s data will probably be needed before a definitive conclusion can be reached.

Richard Sexton, Director of Business Development at e.surv Chartered Surveyors, says that the York property market is showing more signs of activity due to the diverse employment available and a developing economy, with the industries of technology and science becoming more prominent. “In comparison with 2008, vendors are now being more realistic,” he says. “Some are taking low offers to achieve sales but presumably are making it up at the other end. The lower end is taking the biggest hit. Expensive properties are performing better but there are still some bargains available.”

“Three bed semis seem to be selling best but also quality rural properties are showing that demand still exists and there are still good prices being paid with bargains available in some areas. The flats market is probably worst hit due to oversupply, particularly of new build.”

Ben Pridden, Head of Residential Sales at Savills York office, added that price falls slowed significantly during the first quarter of 2009. The company’s prime property index values fell by three per cent in this quarter, compared with 6.6 per cent in the final quarter of 2008, resulting in total falls of 19.3 per cent from the peak in September 2007.

Ben Pridden agrees that there are some positive signs in the market place. “We believe that if sellers are prepared to reflect the recent decline in values when considering a price prior to marketing, their homes will sell. We all know houses that have sat on the market for months and even years, almost without exception the reason will be they are quite simply too much money,” he comments.

Like e.surv Chartered Surveyors, Savills are hopeful that they are near the end of this cycle with the market bottoming out in the first part of 2010. “People are beginning to buy houses again – but as homes and not the investment vehicles they became,” Ben Pridden adds.


York stats


Reuben Barrett, Managing Director of Coalters Estate and Letting Agents York, is less optimistic. He believes although transaction levels are at around the bottom having fallen dramatically for the last two years, he believes it will take some time for confidence to return. “Although prices have fallen about 20 per cent in York, I believe we still have another five to 10 per cent to go over the next year. From then on, I expect the market to rise very slowly over several years that that it will be another five years before the market is back to anything approaching ‘normal’.’

Both Coalters and Savills agree that there is now increased demand and short supply. “There has been an increased number of buyers over the last few months as there normally is at this time of year,” says Reuben Barrett, “But supply remains constrained as sellers are reluctant to accept today’s prices. This has helped to slow the decline the prices.”


York stats

Most agents we spoke to report that they are near enough achieving vendors’ asking prices so long as the vendor is not overoptimistic and properties are realistically priced. Most have a good proportion of motivated buyers. Coalters report that they are selling a very high percentage of properties and in the first quarter of this year agreed sales on 47 properties, and simultaneously increased its average fee to about 2.5 per cent. Hunters The Estate Agents achieved 123 sales from a stock of 216 during the first quarter of this year. Average number of viewings before a sale is secured is about 15 currently. One agent reported it peaked at 23 at one point during 2008. When asked what proportion of clients were first time buyers, responses ranged from two per cent to 25 per cent.

Hunters The Estate Agents have recently announced further expansion by recruiting more personal agent home workers as part of its franchise operation. The group is experiencing a stable market in York with volumes similar or slightly higher than 2008. Managing Director, Kevin Hollinrake anticipates no further price falls. “Sales had a tough year in 2008 but sales volumes for the first quarter in 2009 are up around 30 per cent on those figures. Instructions are in short supply which will mean that prices will stabilise even though overall volumes are still around 50 per cent of their peak”. At a time when many agents are closing their door due to the tough market conditions, York has even seen a few new agents opening up – a real sign of confidence returning. Opus Estate Agents recently opened in York in February and is confident of success.


York houseA Wide Selection of Property Types With Broad Appeal

York’s medieval streets are brimming with semi-detached houses, terraced houses, detached houses and newly developed city centre flats. York’s property market is varied and prosperous with prices ranging in value from £60,000 for one bed flats to £500,000 for six bed detached houses available within a few miles of York city centre.

Detached and executive homes, including new-builds, start at between £250,000 and £500,000. There are approximately a dozen new developments ringing York’s perimeter.



York houseSpecimin House Prices

Savills currently have a good selection of family homes on its books:

South Parade, £595,000 – Victorian end of terrace riverside house (pictured above)
Gamet House, £485,000 – Regency terraced house
Scarcroft Hill, £525,000 – period terraced house (pictured right)
Westgate, £585,000 – luxury apartment development


Properties recently sold by Coalters Estate and Letting Agents:

Chancery Rise, Holgate, £124,995 – two bedroom apartment
Lavender Grove, Boroughbridge Road, £179,950 - three bedroom semi detached house
Malvern Avenue, Acomb, £189,995 – three bedroom, semi detached house
Redcoat Way, Acomb Park, £194,995 – four bedroom, detached house
Turnberry Drive, Off Beckfield Lane, £154,995 – two bedroom, semi-detached house



Whats New?

Hungate is a landmark riverside development in the heart of York spread across four hectares. Set on the banks of the River Foss, phase one of the Hungate development consists of 129 apartments and 33 townhouses all with luxury fixtures and fittings and the latest eco-technology, As well as providing stylish new homes within the city walls, the £150 million mixed-use development being carried out by Hungate (York) Regeneration Ltd. – a joint venture between Crosby Lend Lease, Evans Property Group and Land Securities – will include offices, cafes/restaurants, etc.

Near the city centre Persimmon is converting Clifton Hospital into nine oneand two-bed flats; prices from £89,950. Hogg the Builder, a local company, has two impressive houses at Ilford Court in the village of Earswick, four miles from York city centre. Both are 3,500 sq ft, are priced at £1.1million and £1.15 million. Northminster is building seven New York-style two-bed apartments in Crambeck Court, in the city centre; from £112,500. More than 200 Georgian-style houses are being built in St Peter’s Quarter near the ancient walls by Wilcon. Flats and houses currently available cost £84,995 to £239,950 . Barratt has three developments in York, one at The Acorns from £76,995.


York stats


York houseRental Market

Whilst the sales market has suffered in the present economic climate, letting agents such as Martin & Co report that the York rental market seems to be stable and York continues to have a strong demand for quality residential lets which is being met by an increased supply of property coming onto the market.

However rents have generally been coming down, due to this excess supply of property to rent, though Hunters have not seen a significant decrease and The Property Company is seeing rent levels remaining in line with last year as growing supply as been taken up by demand from those who can not find a mortgage lender rather than a lack of willingness to purchase. Coalters Estate and Letting Agents and Hunters report that rents remain under pressure, with increased supply from reluctant sellers now opting to rent their properties, particularly in three and four bedroom family homes. Sellers have been reluctant to accept the price reduction and have chosen instead to refurbish and let their property on shorter terms until they can realize an increase in equity. This has meant that the quality of property available to let in York has improved over the last nine months.

With interest rates at record lows, letting agents believe that it is likely that yields will remain at their current levels for a few years. For investors who have seen the cost of their borrowings falling, maintaining rent levels is more than satisfactory. The high amount of student accommodation needed for the two universities helps maintains a healthy rental market and makes York a good rental investment opportunity. Most letting agents have a full range of properties on their books ranging from small serviced apartments for businessmen to five bedroom farm houses. “Well appointed, fully furnished city centre properties with parking are always in demand as are good quality homes,” says Cathryn Houghton, Director of specialist letting agent City Lets York. “Currently we have had an increase in demand for furnished apartments and excess in supply of two bedroom unfurnished ones, lowering some rental.” One bed flats achieve £500 to £600pcm, two bed flats £575 to £800pcm, two bed houses £550 to £575pcm, three bed houses £600 to £1,000 pcm and four bed houses anywhere between £750 and £2,000pcm.


York stats


York houseCity Lets current offers

Westgate (pictured right), a two bedroom fully furnished luxury apartment for £1100.00 pcm. Postern Close, a river fronted furnished one bedroom apartment with parking £695pcm. Winsor Court, a new development of two bedroom apartments unfurnished £750pcm upwards.


Buy-to-let – invest now!

Although there are the occasional opportunistic cash buyers looking for bargains, Reuben Barrett Managing Director of Coalters Estate and Letting Agents believes it will be many years before the York market sees a return to the frenzied buy-to-let investors or investment clubs who previously bought without even viewing at unrealistic valuations. Savills are seeing some activity at the moment with emerging investors wanting to invest in smaller developments of apartments. One bedroom apartments of up to £150,000 are particularly popular. Says Ben Pridden of Savills, “There are one or two people I know preparing funds. My advice to investors is to start to look to invest in blue chip property now before it is snapped up. By the time the bottom is recognized it will be too late!”

York bridgeThe Property Company agree that for an investor who can access money, now is the time to be purchasing with reduced prices and vendors willing to negotiate hard for the first time in years. However, Kevin Hollinrake of Hunters is even more optimistic. He believes the investment market is holding up well as he is seeing more cash buyers than he has ever seen in 25 years of working as a York estate agent.

Likewise City Lets’ Cathryn Houghton has seen investors taking cash from the bank to buy properties and investors looking out for repossessions.


York houseAUCTIONS

Hunters Property Group say that whereas in 2008 auction properties were usually 20 per cent to 30 per cent below perceived market value, it is now offering lots at 40 to 50 per cent less than last year’s value, reflecting the current sales market. However, Savills believe that investors are now turning their attention back to the property market. The company’s auction department undertakes up to 20 auctions throughout the year around the country for both residential and commercial property and have branched further north with two auctions this year held at Leeds United FC, covering the York and surrounding area property market.

“Properties offered have been diverse with substantial period property, land and some excellent investment property to tempt developers with an eye to the future recovery of the market,” says Matthew Jones, Director at the Leeds office. “The 17 lots submitted for the last auction also included a selection of traditional residential property at guide prices from £55,000 to £200,000 in various locations including Leeds, York, Bradford, Sheffield, Hull, Newcastle, Middlesbrough and Co Durham.”

Chris Charlton, Savills Auctioneer comments, “There will inevitably continue to be distress sale properties being offered to the market generally but especially at auction and these can often provide fantastic opportunities both for existing and new investors and also, of course, for the owner occupier.” Hunters Property Auctions/Yorkshire Property Auctions holds six auctions a year at York racecourse. The company has also seen an increase in vacant properties being offered for auction. “Normally these properties have been offered at a higher level on the residential market with no takers”, says John Waterhouse, Director and Auctioneer. “The properties are often in need of improvements. This type of property seems to attract the small builders and DIY enthusiasts. Builders part exchanges and also new properties offered at knock down prices have also created a lot of interest.”

Hunters report that they are not seeing any repossessed properties, the majority are being offered and sold through its residential offices by private treaty. It is successfully selling approximately 60 per cent of lots offered and a further 20 per cent after auction. Examples of recent February sales: Persimmon, new two bed flat close to York City Walls. Previously marketed in 2008 at £200,000 sold at auction for £120,000. Mill Mount York, three bed penthouse near racecourse. Previously marketed in 2008 at £695,000 sold at auction for £405,000 White House Farm, four bed farmhouse with 3.2 acres in the outskirts of York. Auction guide £500,000 sold for £412,000.


Commercial

Unlike the residential sales and letting, the commercial market in York and surrounding area is very static with few transactions taking place across board, reports Stephensons commercial property arm. Says John Kirk, “There are more properties on the market both for sale or to let with very little interest being shown. There are properties that have been on the market for well in excess of 12 months and what transactions have taken place have been less than the perceived market value.