Advice to home sellers amid Yorkshire's "less urgent" property market

Aerial drone photo of Harrogate, North Yorkshire, showing residential housing from aboveAerial drone photo of Harrogate, North Yorkshire, showing residential housing from above
Aerial drone photo of Harrogate, North Yorkshire, showing residential housing from above
Those home movers who are most reliant on borrowing are starting to reduce their budgets in the face of rising interest rates and the increased cost of living, according to new research by property firm Savills.

A survey of more than 1,000 prospective buyers undertaken at the end of August 2022 reveals that commitment to move has also fallen, at least in the short term.

The net balance of people who are more committed to move in the next three months has fallen to -1.7 per cent, while +7.1 per cent feel more committed to move in the next year, versus +22 per cent in April 2022.

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However sentiment remains more positive for the medium term, with a net balance of +15 per cent stating they are more committed to moving in the next two years, on par with last Autumn.

Ed Stoyle, director at Savills in YorkshireEd Stoyle, director at Savills in Yorkshire
Ed Stoyle, director at Savills in Yorkshire

Upsizers vs downsizers

Those looking to enter the market or extend borrowing are most cautious when asked about commitment to move within the next six months.

This caution is most expressed by those looking to upsize (net balance of -10 per cent) and those in the market for such as a second home (-31 per cent) or investment opportunity (-8.7 per cent).

But not all buyers are deterred by the tougher economic outlook. Those looking to downsize (+6.6 per cent), relocate (+7.4 per cent) or are living in regional parts of the UK (+3.9 per cent), such as Yorkshire and its surrounds, are more committed to move within six months.

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Lack of stock remains an issue with more than half of buyers.

Impact of interest rates and increased cost of living

For the majority of buyers, the amount they plan to spend on their new home hasn’t changed. Most respondents plan to use the same funding source.

Around 7.8 per cent plan to spend the same, but are likely to reduce borrowings, and dip deeper into equity pots.

However, recent interest rates rises and increased living costs are impacting buyer budgets in some market areas.

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Almost a third of prospective buyers said they have reduced budgets in response to these factors.

This is most true for those more reliant on borrowing – including half of first time buyers, and 44 per cent of ‘mover uppers’.

Cohorts least impacted were downsizers, with two-thirds keeping budget and funding the same, and those moving outside of London (59 per cent).

Ed Stoyle, director at Savills in Yorkshire, said: “Despite transactions remaining robust over the summer, there’s now less urgency in the market, with rising costs of debt impinging on the budgets of those most reliant on a mortgage.

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"Increased costs of living are also making buyers much more conscious when it comes to how much they are willing to spend.”

He added: “Ultimately, in the short term, the market will be predominately driven by home owner need, rather than lifestyle influences which drove the market during the pandemic…

“After more than two years of runaway house price growth, sellers will need to become much more realistic when pricing their home, especially as more stock comes onto the market.

“As and when inflation has been tamed, the cost of debt eases and we see a pick-up in both domestic and global economic growth, we can expect price growth to return to these markets.”