As we are now nicely into 2024, it’s certain the Harrogate housing market over the last 18 months has been a little more restrained than 2020, 2021 and early 2022, and I believe that the ‘steady as she goes’ outlook will continue into the rest of 2024 and beyond.
As property ownership is a medium to long-term investment, it is important to see what has happened to Harrogate house prices.
Since the start of the Millennium (Jan 2001), the average Harrogate homeowner has seen their property’s value rise by an average of 201%.
This is important as house prices are a national obsession and tied into the health of the UK economy as a whole. Most of that gain has come from the overall growth in Harrogate property values, while some of it will have been enhanced by extending, modernising, or developing their home.
Taking a look at the different types of property in Harrogate and the profit made by each type, it makes interesting reading:
- Overall Average for All Homes in Harrogate. The average price of all homes in Harrogate in 2001 was £117,557. Now it’s 2024, and it has risen to £349,782. This is a total profit of £232,225 (which is £10,097 profit per year per home or an annual growth of 8.7% per year).
- Apartments in Harrogate. The average price of an apartment in Harrogate in 2001 was £111,250. Now it’s 2024, and it has risen to £205,211. This is a total profit of £93,961 (which is £4,085 profit per year per home or an annual growth of 3.7% per year).
- Terraced/Town Houses in Harrogate. The average price of a terraced/town house in Harrogate in 2001 was £77,135. Now it’s 2024, and it has risen to £320,149. This is a total profit of £243,014 (which is £10,566 profit per year per home or an annual growth of 13.7% per year).
- Semi-Detached Homes in Harrogate. The average price of a semi-detached home in Harrogate in 2001 was £91,781. Now it’s 2024, and it has risen to £330,828. This is a total profit of £239,047 (which is £10,393 profit per year per home or an annual growth of 11.4% per year).
- Detached Homes in Harrogate. The average price of a detached home in Harrogate in 2001 was £192,429. Now it’s 2024, and it has risen to £682,462. This is a total profit of £490,033 (which is £21,306 profit per year per home or an annual growth of 11.0% per year).
However, we can’t forget there has been 79% inflation over those 23 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we take into account inflation since 2001, the true ‘spending power’ of that profit has been lower.
- Overall Average for All Homes in Harrogate. The total ‘real profit’ (i.e., after inflation has been removed) for the average Harrogate home is £129,229 for the last 23 years. This equates to £5,618 ‘real’ profit per annum.
- Harrogate Apartments. The total ‘real profit’ (i.e., after inflation has been removed) for the average Harrogate apartment is £52,288 for the last 23 years. This equates to £2,273 ‘real’ profit per annum.
- Harrogate Terraced/Town Houses. The total ‘real profit’ (i.e., after inflation has been removed) for the average Harrogate terraced/town home is £135,233 for the last 23 years. This equates to £5,880 ‘real’ profit per annum.
- Harrogate Semi-Detached Homes. The total ‘real profit’ (i.e., after inflation has been removed) for the average Harrogate semi-detached home is £133,026 for the last 23 years. This equates to £5,738 ‘real’ profit per annum.
- Harrogate Detached Homes. The total ‘real profit’ (i.e., after inflation has been removed) for the average Harrogate detached home is £272,695 for last 23 years. This equates to £11,856 ‘real’ profit per annum.
Thus, the annual profit for an average Harrogate home,
adjusted for inflation, stands at £5,618.
I wanted to illustrate that despite the 2008/09 Credit Crunch property market crash, which saw Harrogate property values plummet by 15% to 20% over 18 months, homeowners in Harrogate have still fared better over the long term than those renting.
Looking ahead, a common question I get asked is about the
future trajectory of the Harrogate property market.
The primary influence on maintaining house price growth in Harrogate over the medium to long term will be the construction of new homes locally and nationally. Although we have yet to get the figures for 2023, government sources indicate that the number of new households is expected to be between 210,000 and 220,000. Considering the annual need is for 300,000 new households to meet demands arising from factors such as immigration, increased life expectancy, higher divorce rates, and later cohabitation, it’s clear that demand will continue to outstrip supply unless the government heavily invests in building council houses.
This can only be good news for Harrogate homeowners.
What about Harrogate landlords, though?
Even though the number of landlords liquidating their property portfolios has increased in the last couple of years and the number of landlords buying is lower than in the 2000s and 2010s, there is still net growth in the size of the private rented sector each year. This is all despite facing higher taxes. The simple fact is many Harrogate landlords remain keen on expanding their portfolios in the long term.
The younger generation in Harrogate views renting as a choice that offers flexibility and alternatives that homeownership does not provide. This means that demand for rentals will keep growing, allowing landlords to enjoy rising rents and capital appreciation. However, Harrogate buy-to-let landlords must adopt more thoughtful strategies to maintain profitable returns from their investments.
As a Harrogate buy-to-let landlord, the question for you is how to
ensure this growth continues.
Since the 1990s, generating profits from buy-to-let property investments was straightforward. Moving forward, with changes in the tax laws and the balance of power, achieving similar returns will be more effortful. Over the past decade, I’ve observed the evolution of agents from mere rent collectors to strategic portfolio managers. I, along with a select few agents in Harrogate, am adept at providing comprehensive, strategic portfolio leadership. This service offers a structured overview of your investment goals across short, medium, and long-term horizons, focusing on your expected returns, yields, and capital growth. If you seek such advice, feel free to contact your current agent or me directly at no cost or obligation.
