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Spotlight Savills and Darlington Residential Offices 2016

savills.co.uk/research 03 Spotlight | Savills York and Darlington Residential Offices

Market overview Average values Well connected In the 15 months to March 2016, the average sale price The urban markets remain strong but demand across the local authority of York, which includes the city has rippled out to the commuter villages but stretches from Strensall in the north to Copmanthorpe in rice growth across level. However, signs of recovery the south, was £243k, according the local authority of can be seen in these markets to Land Registry records. This PYork has significantly as prices rose 2.1% in Q1 2016, is 43% higher than the region outperformed the rest of the strongest quarterly growth average of £170k for Yorkshire since the credit since 2009. This is being driven and the Humber. crunch. In the prime housing by increased positive sentiment The most expensive areas markets, average values in and a number of buyers who are the wards of Derwent to the York city centre are now 13.4% have been looking for a long time east of the city, which covers the above their 2007 peak. committing to buying. village of Dunnington, and Rural The strong growth in the city In Darlington, the housing West York, containing Upper and centre highlights a continuing trend market has yet to see prices Nether Poppleton, which saw seen across the UK. Attractive recover since the 2008 credit average sale prices of £322k and towns and cities that are well crunch as local buyers remain £312k respectively. connected, have a core of good price conscious. On average Across , the quality family housing and a choice prices are -23.6% below their average sale price was £217k. of high-performing schools have 2007 peak, in line with the High value locations within the become the focus of a widening average for the north east. Over county include Harrogate and profile of affluent buyers. York ticks the past year further price falls the Howardian Hills, the latter of all these boxes and more. of -1.9% were seen. However, which had an average sale price By contrast, as soon as locations such as central of just under £360k, two thirds you move outside of York to Darlington and Middleton St higher than the county average. the surrounding villages and George have completely bucked On the coast, the highest value countryside, prime values are still this trend, seeing nearly 25% village is Scalby, which had an on average -18.8% below this growth over the past five years. average sale price of £238k.

York In comparison to York, the its commuter villages and the as buyers recognise the very average sale price in Darlington Howardian Hills. However, over large value advantage. was £148k in the 15 months the past two years, the buyers Good schools attract many to March 2016, in line with the from outside the region have families to both York and average for the north east. moved from a wider range the surrounding villages as The most expensive areas are of locations, rather than the the majority of both private to the south west of the town predominance from London and state schools in the city centre, with Blackwell (the seen previously. perform above the national ward of Park West) having an Buyers moving from the average. Families with children average sale price of £278k and capital still play an important accounted for nearly three- Hummersknott an average sale role as we see the ripple effect quarters of buyers of prime price of £246k. continue. In some cases, the property over the past year and London commuter belt reaches the high-performing schools, Demand as far as York, with 24% of such as Millthorpe and Fulford, Over the last five years, local buyers of prime property in drive demand within their buyers from Yorkshire and York and 7% of buyers in the catchment areas. the Humber have consistently surrounding villages working in York city centre increasingly accounted for three-quarters London, although often just attracts older buyers looking to of prime purchases in York, three days a week. This comes downsize, often moving from the

Figure 1 Prime property price movements If your property was worth £1m in 2007, what would it be worth now? n All Prime London n Prime York City n All Prime UK (excluding London) n Darlington n Prime York Surrounds

£1,500,000

£1,400,000

£1,300,000 £1.35m

£1,200,000 £1.14m

£1,100,000

£980k £1,000,000

£900,000 £817k £800,000 £770k £700,000 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 May-08 May-09 May-10 May-11 May-12 May-13 May-14 May-15

Source: Savills Research, Land Registry 2016

countryside to be closer to local amenities and the blend of urban and rural lifestyle this compact city offers. Other buyers include young professionals, buy to let investors and second home buyers. In the countryside surrounding York, although not as numerous as before the credit crunch, second home buyers are attracted to the country homes and coastal hotspots nearby. In Darlington, the market is more local than York with the majority of buyers moving from within the region. The relatively strong employment in Darlington plays an important role in attracting buyers and 64% of people living in Darlington work locally, according to the 2011 census. However, the good transport Darlington links are also attracting people to buy in Darlington for better value properties and then Figure 2 commute out to higher value What would the same sized property sell for in locations such as Newcastle different locations? and Durham. n

Period property, 2,000 sq feet, 4 bedrooms

Property Street Name Post Code Sale Price 24% Terraced house East Mount Road, York YO24 £600,000 Buyers of prime property Village house Hovingham, North Yorks YO62 £500,000 in York work in London Detached house Malton, North Yorks YO17 £400,000

Terraced house Fife Road, Darlington DL3 £295,000

Middleton Tyas, Terraced house DL10 £450,000 North Yorks

64% Detached house Hurworth, Darlington DL2 £500,000 People living in Darlington who work locally Terraced house Fulham, London SW6 £1.95m

Source: Savills Research Spotlight | Savills York and Darlington Residential Offices

The economy High value employment markets

Wealth creation will continue to strengthen the demand for residential property in both York and Darlington

ork and Darlington by 5.1% across the local initial plans, both Darlington and are important urban authority of York and by 2.2% in York are well placed to benefit. Y locations within the UK the local authority of Darlington. For example, the electrification with strong local economies. Positive employment growth of the railways will better Although the majority of is expected in many sectors with connect the main cities and wealth is generated within the professional, scientific and attract new industry to the area, these economies, the major tech sectors expected to see the such as Hitachi’s rail vehicle financial centres of London largest increase in both areas. manufacturing facility, which has and Edinburgh are easily As these high value employment created 730 new jobs in Newton commutable, with fast trains markets become increasingly Aycliffe near Darlington. n linking York and London in important, the resulting under two hours. wealth creation will continue Both locations have to strengthen the demand for historically prospered on their housing in both city centre and large manufacturing and railway commutable locations. industries, yet this emphasis An exciting opportunity for the has more recently shifted to the area is the Northern Powerhouse Positive employment service sector. Forecasts from policy, which is helping shift the growth is expected over Oxford Economics anticipate the focus of investment from the the next 10 years employment market will grow south to the north. Although over the next 10 years, neither location is included in the

York station 2016

trend for urban living remains popular. However, villages and Outlook rural countryside now represent continued recovery good value in comparison to larger towns and this will make them a very attractive prospect York and Darlington’s housing markets will to some buyers. We have already benefit from an improvement in buyer sentiment seen a significant increase in activity this year in villages to the north of York. he prime housing and the south east to the north, The recent stamp duty changes, markets of York, we believe that the prime imposing a 3% surcharge on the T Darlington and the housing market will benefit purchase of ‘additional homes’, surrounding villages and from a continuing improvement poses a slight threat to the countryside are largely in buyer sentiment. investment and second home dependent on wealth We expect prime urban markets due to the increased generated in the local markets to continue tax burden. These markets will economy. As economic outperforming their neighbouring therefore remain price sensitive, recovery spreads from London villages and rural areas as the especially for high value properties that have not had the historic stamp duty increases priced into the market. Looking forward, we forecast that prime values across the north of will grow by an average of 18.2% 18.2% over the five years to 2020, The trend for urban Growth of prime values as the local economies strengthen living remains across the north of and buyers become more aware of popular England to 2020 the comparative value this region offers, particularly regarding higher value properties. n

Savills team

Sophie Chick Ben Pridden Tanya Coffey Melissa Lines William Thornton Residential Head of Residential, Residential Head of Residential, Residential Research York York Darlington Darlington 020 7016 3786 01904 617 821 01904 617 818 01325 370 509 01325 370 500 [email protected] [email protected] [email protected] [email protected] [email protected]

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