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Viewpoint

 VIEWPOINT
July 2010

North Yorkshire prices set to fall further

Tim Blenkin of Blenkin & Co reports that, “Many North Yorkshire houses are still overpriced by between 10% and 20% and significant price reductions are, in the end, inevitable.  The demise of Home Information Packs may have helped to bring more properties back on to the market but with new buyer enquiries on the decline, prices have succumbed to the laws of supply and demand and are already falling.”

“Looking ahead, it is generally agreed that the period from 2010 to 2015 will see higher taxes and restraint on public spending. White collar jobs will be lost, many pay packets reduced and, with mortgage lenders unwilling to lend, properties will be unaffordable even for first time buyers with good qualifications and out of reach to many homeowners wanting to upgrade.  Already we are seeing banks denying bridging loans to those wanting to downsize before selling their bigger family home.

So who are the buyers of 2010?  “Recently, the higher end of the residential market has been driven by a few cash-rich buyers”, says Tim Blenkin.  “We have just sold Copt Hewick Hall near Ripon for a figure close to its £5 million guide price and, within three weeks of being instructed, a fine York town house at its £1.4 million guide price. Two other York townhouses have sold quickly to cash buyers, one from London and another to a successful local businessman; and a house near Helmsley has been bought by a wealthy international family.  Our troublefree sales, recently including houses in Bolton Percy, Sutton-on-Derwent and Haxby, involve cash buyers who are downsizing or clear headed buyers who respond to the right property at the right price and pounce on a new instruction.  But these sales are the exceptions not the rules.  The fact is that there are fewer numbers of people willing or able to upgrade, and any property viewed as even remotely run-of-the-mill needs acutely competitive pricing to move it.  The situation is not helped by many cash buyers being paralysed by what they perceive as overpricing and not taking advantage of their strong position to bid 20% below asking and agree terms somewhere in between.”

“Many buyers from outside the York area – on whom we have historically depended to boost prices – think our local asking prices are unjustifiably high. One buyer who has recently sold in the edge-of-the-Cotswold spa town of Cheltenham, is baffled: “For the asking price of a typical five-bedroom village house marketed by one of the York agents, I can buy a Cotswolds Georgian Rectory – it’s crazy! You are killing the goose which has for years laid your golden eggs, and entirely blaming the recession for a stagnant market. Why would North Yorkshire command values in excess of those seen in an area fed by London bonuses?”

Tim Blenkin confirms that, “It is evident that many properties around York are advertised at a price that will tempt few buyers into action.  Whilst sellers seldom have an interest in pitching their property at true market value, many estate agents are again competing for business by pricing to entrap sellers, apparently from a desire to fill the window or website. Soon the effects of this will be seen everywhere: the property market will stall and, as sales volumes fall, so will estate agents.  Already in the York area we have seen firms closing or amalgamating.  The reality is that some estate agents are already running on empty and economic recovery is by no means just around the corner.”

“On a happier note” says Tim Blenkin, “the York area is a popular place to live with strong employment, a low crime rate, excellent schooling and superb railway connections to Leeds, London, Newcastle and Edinburgh.  Tourism, York University, Nestle and Aviva as well as the bio-sciences, IT and the digital and creative media industries add to the prosperity of the area and offset the loss of future jobs in the biggest employer, York City Council. 

“York and the surrounding areas are well placed to weather a downturn, and good housing will always be sought after.  If estate agents and homeowners can come to terms with lower property prices across the board, the local residential property market will be free to flourish even during these difficult times.”

Tim Blenkin MA MRICS
Blenkin & Co
August 2010