House Prices Remain Close to Record High; Sales Volume Stagnant
- Worst October on record for house sales in South Yorkshire.
- 2023 price drop nominal, compared to growth trend of past 10 years.
- The average home in Sheffield is 14% more expensive than across South Yorkshire.
How does the Bank of England Influence the South Yorkshire property market?
House prices in South Yorkshire rose with inflation but fell with the base rate hikes. Now that inflation is back in line and the base rate is steady (and expected to fall), asking prices from January were higher than they were in the same month last year, for the first time in six months.
Uncontrolled inflation means that prices rise too quickly, and we need more and more money to buy the same things, decreasing it's value in real terms. The Bank of England (BoE) have risen the base rate to curb inflation and keep the economy stable, which is why house prices are levelling out.
Will there be a UK recession in 2024?
The UK Economy fell into recession last year, but the Bank of England predicts positive growth of 0.25% in 2024 and 0.75% next year.
This, however, is well below the pre-pandemic average. NEISR estimate that Britain's poorest households will not recover fully until 2027.
The BoE are expected to reduce the base rate (which directly affects the cost of borrowing money) slightly in March. This will ease financial pressure on normal people like you and I, and will likely get the economy moving again. When people have a bit more money to spend, they buy more; driving prices up on goods and, you guessed it, houses. Inflation can continue at a healthy pace; ideally, we want it to come down to around 2%.
More affordable borrowing means more home buyers and home movers, which should lift the volume of property sales in South Yorkshire and beyond.
Worst October ever for house sales in South Yorkshire
October saw just 838 property sales for the whole of South Yorkshire, which is significantly worse than the second worst October of 1,063, back in 2009. That's a fall of 54% from last year's 1,544. The region of South Yorkshire is not doing miles worse than the country as a whole though, where property sales volume fell 45% from last year.
The Land Registry data for sales volume is always a few months behind. Anecdotally, we have seen a much busier market entering 2024; cuts to mortgage rates at the beginning of the year and some slight growth in average asking prices is already greasing the wheels of local and national property markets.
Are house prices rising in South Yorkshire?
Sold house prices in South Yorkshire fell from October to December last year, as per national trends; however, national house prices began to rise again in December, which may indicate that South Yorkshire will show the same with a slight delay, as we have seen on the previous curves.
The latest accurate average sold house price for South Yorkshire is £186,870, which is £44,320 or 31% higher than it was five years ago (£142,550). The recent 'wobbles' in house prices in South Yorkshire are minor compared to the overarching growth of the past ten years. We'll discuss how house prices are rising in different districts in South Yorkshire, below.
Do you need conveyancing services for a South Yorkshire property?
South Yorkshire property sales volume weakest in Rotherham
Property sales in Doncaster, Sheffield and Barnsley are just ahead of the national average at 57%, 56% and 56% versus the same month last year. Rotherham alone is falling behind with only 46% of the total completed sales compared to 2023. This might be down the the comparatively stronger growth in Rotherham.
If buyers are not seeing the same bargains as elsewhere in South Yorkshire, they may not be so keen to buy; simultaneously, sellers may be waiting for prices to climb further before putting their house on the market.
Sheffield remains the most expensive district to buy a home in South Yorkshire
Property in Sheffield is £25,486 or 14% more expensive than the average for the region as a whole, which may account for its weaker growth compared to the rest of South Yorkshire. Sheffield is England's fourth largest city with an economy worth £11.3 billion, a world class university, and the stunning Peak District National Park on it's doorstep.
In which areas in South Yorkshire are property prices rising?
Property prices in Rotherham rose in December, compared to the same month last year. Property prices rose in Barnsley in November. While there is no more-recent data available from the Land Registry on actual sold prices yet, trends indicate that average house prices have risen nationally in January and February; so, we can reasonably expect the Land Registry data to show property prices in South Yorkshire rising as it is published.
Property price growth strongest in Rotherham
Rotherham is a minster town on the River Rother, with good road and rail links. It is a thriving manufacturing hub and one of the most rapidly expanding economies in the country. It lies in a green belt and so retains some unspoilt nearby countryside.
New house prices in South Yorkshire soar in second half of 2023
New houses come at a premium and their average price data is not diluted by derelict properties and fixer-uppers, as the average price of existing property can be; so, we expect to see new prices following a higher line than existing ones. However, the gap has been widening for some time, and after July of last year, we can see new house prices in South Yorkshire deviate from the pattern, climbing steeply away from existing house prices.
A similar pattern can be seen in the region of Lancashire. Why are new build property prices growing at such an accelerated rate? Rebecca Goodman discusses the many factors in her article for the Independent New-build property prices rising twice as fast as cost of older homes.
The value-gap between houses and flats in South Yorkshire has stopped widening.
Following the pandemic, house prices overtook flats and maisonettes. This was in part also down to the leasehold scandal, which was damaging the PR of flats, maisonettes and leasehold houses since the early 2000s, and has now been largely resolved. As a result, the gap between house and flat prices, which widened over the past few years, seems to have levelled out with a relatively steady gap in property values in South Yorkshire over the past year.
As expected, detached houses are the most expensive in South Yorkshire, consistent with the rest of the country. There are in shorter supply, they offer more privacy and often offer more bedrooms and inside and outside space, as well as generally being found in well-spaced and desirable locations.
Where is the best place to live in South Yorkshire?
Trail guides and maps website All Trails named Stocksbridge as their number one place to live in South Yorkshire. Stocksbridge is a 30 minute drive outside of Sheffield, home to a tastefully developed shopping park, and surrounded by beautiful cycling and walking routes. Beloved by its residents and cheaper to buy a home in than Sheffield, Stocksbridge may well be the best place to live in South Yorkshire.
What is next for the South Yorkshire property market?
The South Yorkshire Mayoral Combined Authority aim to :
- Improve the quality of existing and new housing stock, whilst maintaining housing growth;
- Ensure the supply of good quality, attractive and sustainably developed employment land that is widely accessible; and,
- Proactively work on strategic planning opportunities to unlock potential through joined-up investment packages.
The 20-year Strategic Economic Plan (SEP) promises to deliver an extra £7.6bn GVA, 33,000 extra people in higher level jobs, reduced income inequality and improved wages by over £1,500 for the lowest paid, and a net zero carbon economy, by 2041.
The Superfast South Yorkshire partnership delivered superfast broadband to homes in South Yorkshire, where 99% of homes and businesses now have access. They are now rolling out 5G data across the region.
The Connected by Water Initiative involves over 100 projects to better protect over 25,000 homes and businesses, and regionally significant infrastructure across South Yorkshire, in the face of climate change.
These projects will improve living conditions, employment opportunities, and environmental longevity, which we expect to support the growth of the South Yorkshire housing market.
Should I buy a house in South Yorkshire?
South Yorkshire is an excellent location for homeowners who want to tick multiple boxes:
- Rural charm or vibrant cities
- Excellent transport links
- Nightlife
- Well preserved architecture
- Industrial & agricultural heritage
- National Parks
- Wildlife
- World class university
- Sport, culture and art
"After a dire end to 2023, January and February show a mini-bubble caused by high mortgage rates. So much so that mortgage lenders are increasing their mortgage rates in a bid to slow down the market before an imminent drop in the base rate."
"I don't think the mortgage lenders dampening will slow in the release of the mini-bubble for home buyers, but it will for the remortgage market. This will improve in April after, in my opinion, the base rate is reduced to 5% in the March review by the Bank of England"
"The budget is going to have a lot of property news, and this is what I think is coming: Remove stamp duty up to £500,000 for anyone over 60 who is downsizing. Capital Gains Tax allowance reduced to £1,000 for 2024-25. 99% mortgage guarantee scheme for First-Time Buyers only. These changes will create huge opportunities in the housing market in 2024."
- Andrew Boast FMAAT MIC
CEO and Author | SAM Conveyancing
Sources: Latest data from - Gov.UK, Bank of England, UK House Price Index, ONS, Property Mark (NAEA), and Rightmove.
Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.
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