Property Market in Hull

Why not buy a house in Hull?

first-time-buyers

Since the Halifax began monitoring house prices in 1983, the average cost of property across the UK has risen by 428%. The property market in Hull is subject to the same market forces as the rest of the country, but due to its position at the end of a train track in the North of England, house price fluctuations often take time to filter through. There have been very active periods throughout this 30 years when house prices have soared and dipped dramatically. The most exaggerated example of a property boom ended in 2007 with the Global Financial Crisis.

It is a widely held view that the housing market is driven by first-time-buyers. These buyers are at the start of the housing chain and their decision to buy a house or an apartment enables the person who they are buying from to move up to a larger, usually more expensive property. This is the start of the property cycle.

First-time-buyers have struggled in recent years to achieve their first purchase due to a tightening in the banks lending constraints and price pressure on starter homes created by investment buyers hoovering up lower priced properties. This increased demand at the bottom-end of the housing ladder has lead to price inflation and an increased pressure on first-time-buyers to save more and borrow more. The banking crisis in the UK has had a positive effect for them as it has seen the average price of a 2 bedroom house drop to a more affordable level.

The buy-to-let boom has had a lasting effect on housing in Hull. In certain areas it has been credited with tidying up the City as poor quality housing has been improved and upgraded to enable investors to maximise their rental return. This is good news for tenants who can expect a better standard of rental accommodation today, due the increase in the supply of houses made available for renting. A healthy supply and a bit of competition amongst landlords is also important to prevent heavy price inflation in the rental sector.

TickBoxes2

From a property investor’s perspective Hull still ticks a lot of boxes. House prices are now comparatively low and being a City with a large University, there is always strong demand for clean, tidy, reasonably priced accommodation. People choose to rent for a variety of reasons, so it is important that there is a good geographical spread of private rented accommodation available. Evidence shows that there is a requirement for housing across the whole HU postcode area. Currently the rental return, or yield, looks very good. The return on investment will shift depending on the location and the type of accommodation being purchased, but with bank base rates very low and other forms of financial investment proving to be unpredictable, the safety in bricks and mortar still holds as much appeal as ever. As an investor, there is a certain assurance in being able to visit your pension, rather than entrusting the funds to people that you don’t know and are never likely to.

A snapshot taken at the time of writing is below.

Hull – Average house price
£99,238

House type Average price
Detached

£178,419

Semi-detached

£111,394

Terrace

£83,590

Flat

£77,471

At their peak around 2007, these prices were broadly 20% higher. Bank base rates were also higher and rental values were similar. This suggests that there is a good return to be had as a landlord now, compared with the boom times. In other parts of the UK, house prices have started to recover. An increase in sales activity in Hull over the past year hints that the market is heading upwards in this area too.

The economic landscape in Hull gives reason for cautious optimism. A planning application submitted by Siemens to develop an offshore wind turbine factory would have a transformative effect on Hull and on the Humber area. With Green Port Hull drawing people to the area and raising the profile of the City nationally, there would are good reasons why Hull should be seen as an exciting venue for prospective investors.

by Tony Cook – Marlborough Estate Agency (16 February 13) www.marlboroughestates.com

Estate Agents in Hull

Estate Agents in Hull