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Bradford tipped as the property market to watch as fears of a bubble are misplaced by new Savills report
May 28, 2014Article by Ray Withers
As property markets pick up in the regions, Bradford is tipped as the one to watch. The city’s estate agents revealed confidence in the region is rising after house prices increased by 5.3 per cent in Yorkshire and Humberside in the 12 months to March. According to the Office for National Statistics (ONS), the average price of a property in the overall area is now £169,000. Although this remains below the national average of £252,000, the increase has brought more optimism to the local market.
A brighter Bradford but stock is low
James Watts, director at Bradford agent Robert Watts, comments: “The market is better in Bradford; it’s busy. Bradford still has a lot of old stock, but not much new stock coming through. Prices in this part of the world are not going up drastically. The market is getting brighter though. In Bradford the average price is lower, between £100,000 and £110,000 across the board for all different types of property.”
Patrick McCutcheon, head of residential at Dacre, Son and Hartley, agrees: “These figures don’t surprise me. The first-time buyers are much more active than they were. They are starting to push lower priced properties, which are more noticeable than the other extreme of the market. There is more of a bubble of demand for properties in the lower end of the market. There is a relative shortage of £1 million property purchases at the moment.”
According to Andrew McPhillips, group economist at Bradford-based Yorkshire Building Society: “House prices in this region are increasing in line with the national average when you exclude London. However, this is not at such a high rate that you could really call it a bubble. Similarly there is still some way to go in the region before prices recover to their pre-crisis peak.”
Savills says no bubble to pop, just gradual growth
The latest property market report from Savills also says fears of a bubble are misplaced. The report states: “Certainly, house price rises have been significant in recent months – but current growth has been from a low base. [Fears of a bubble] seem to be characteristic of the housing market after a significant fall; memories are short and, just as ‘irrational exuberance’ takes hold at the peak of the market, a pessimistic tendency to revisit the last problem at the first sign of recovery seems to take hold at this stage of the cycle.”
The report continues: “The mechanisms of an apparent boom at the beginning of housing market recovery are simple and almost inevitable: as optimism returns so the potential buyer numbers rise, but vendors remain thin on the ground because they are waiting for prices to rise. This instant supply-demand mismatch makes competitive bidding and apparent ‘boom’ conditions inevitable at the start of every cycle. The only time for buyers to really take advantage of recovery is buying a year in advance.”
Why investors are choosing Bradford as their angel of the north
Bubble or no bubble, investors are choosing Bradford as their angel of the north right now. The city has a high level of regeneration and associated investment, good opportunities for employment, fast connections to the rest of the country and it offers affordable property against a good standard of living. As house price recovery is currently still slow, Bradford’s own boom has not yet hit and investors are capitalising on this by snapping up the available stock before the trend takes hold.
An optimum investment with non-status finance and perfect timing
Ray Withers, CEO of Property Frontiers, says: “Absolutely the best time to invest in a market is just before its rise. One of the issues slowing Bradford prices down is the lack of new stock. With new stock will come the start of the boom, so an optimum way to benefit would be to invest in that new stock as it arrives.”
He continues: “Our off-plan city living development in Bradford is ideal for this. The units are from £50,000 to £90,000, which is up to a third the average price of a home in the area and also 25% below market value from RICS. They deliver a fixed rental income and a 9% return on capital and also come with up to 50% loan-to-value non-status developer finance. Whichever way you look at it, this is a truly remarkable deal.”
Get in touch on +44 1865 202 700 to find out more about investing in Bradford and how you can gain maximum advantage before the start of the area’s boom.