Yorkshire house prices set to grow by 1.1% next year, according to KPMG

According to research from professional services firm KPMG, house prices in Yorkshire will grow by 1.1% in 2018, despite significant slowdown in the market.

The data collected reveals that houses price growth has stalled in 2017 to 1.1% across the region, from 4% in 2016, as house hunter prepare for Brexit uncertainty.

The forecasts, which are part of KPMG Economics’ regional house price study, have been calculated based on regional housing markets, considering short and long-term economic factors.

Despite the loss in momentum in 2017, KPMG expects the Yorkshire market will bounce back to 1.1% next year before reaching 2.5% in 2019.

The model predicts growth of 3.2% in 2020, 3.9% in 2021, before becoming the third fastest growing market in the UK with 4.4% growth in 2022.

Giles Taylor, head of property and construction at KPMG in Yorkshire, said: “House price growth in Yorkshire has suffered in the short-term, but the market is holding up relatively well and is likely to return to strength in the coming years.

“Of course, there are many differences between property markets across towns and cities and types of housing stock within the region, but prices are generally increasing. It is also encouraging that the region remains one of the most affordable areas in the country.

“Despite the ongoing uncertainty over Brexit and the bite on household income, the projections also reflect positive trends in the region’s employment, population and economic activity, particularly in our major cities where demand is booming for quality accommodation. As job creation continues, we expect a sustained upward pressure on prices.

“Anecdotally, housebuilders are reporting that they continue to show good footfall through their sites and reservation levels are very good. In addition, some of the players in the supply chain are still seeing record months of trading. That being said, those with longer term visibility of their pipeline are starting to tell us that they can see a potential slowdown in the distance.”

Yael Selfin, chief economist at KPMG, added: “With so much going on in the UK at the moment, some fear that the housing market will be the first to snap if the mood changes around the Brexit process, or when interest rates start to rise.

“Our analysis however, shows that with the exception of a few areas in the south, such as London, house prices are not particularly high compared to long term regional valuations. Our projections see a more orderly transition over the next five years, with house price growth moderating further next year before gradually picking up momentum again from 2019.

“Overall, house price growth is expected to fall short of the average enjoyed by all UK regions over the past 20 years, as muted increases in households’ real incomes are expected to dampen growth rates. But it should support consumer confidence and borrowing by SMEs.”