York Location Investment Guide

Built On Reputation

YORK

INVESTMENT LOCATION GUIDE

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Property investment guide YORK Often, it’s the UK’s biggest cities that attract the most interest from property investors. However, with its thriving economy, big development plans and exceptionally strong demand for rented property, the city of York is also deserving of serious attention. In this location investment guide, we’ll consider some of the most important reasons why.

YORK FAST FACTS REGION North Yorkshire

POPULATION 209,900

DISTANCE TO LEEDS 25 Miles, 40 minutes via car, 24 minutes via direct train link

DISTANCE TO MANCHESTER 71.6 Miles, 90 minute via car, 80 minutes via direct train link

DISTANCE TO SHEFFIELD 57.2 Miles, 72 minute via car, 45 minutes via direct train link

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Why Invest in York?

York is certainly a well-known city – a tourist hotspot that draws upon centuries of history – but in recent years, it has also established itself as a high-performing property investment destination. On key measures such as capital growth, gross yield and rental returns, the city has consistently outperformed UK-wide averages, and rental demand here is amongst the strongest in the country.

It’s also market that’s poised to

Thousands of new jobs being created

see a further improvement in performance, thanks to a range of large investment projects and developments close to the city centre.

Set to benefit from the HS2 rail network

Major inward investment and regeneration works Steady growth in high-value industries

The University of York is committing £130 million to an expansion of student facilities, and the local authority is spending tens of millions more on highway and digital

Key Points to Consider

Part of the fast-growing Leeds City Region

A university student population of around 40,000

infrastructure.

And one of York’s most ambitious urban regeneration programmes, York Central, is now underway; a

SHARPLY RISING DEMAND FOR PROPERTY & RENTALS

GROWING POPULATIONS

mixed-use development that is projected to swell the city coffers by well over £1 billion.

Importantly, York benefits from the support not just of its own local authority, but also the inward investment agency, Make It York; two Local Economic Partnerships; and the West Yorkshire Combined Authority – all of which are setting ambitious targets for job creation and economic growth.

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O N E O F B R I AT N ’ S M O S T PO ULAR TOURIST D E S T I N TA I O N S Residential Estates

AN OVERVIEW OF YORK

POPULATION OF

209,900

Set in the county of North Yorkshire, the city of York is

EXPECTED TO RISE TO

a historic walled city and one of Britain’s most popular

232,000 BY 2032

tourist destinations. It is home to two well-reputed universities and it’s an important station on the East Coast Mainline. The city economy is worth roughly £5 billion per annum and, locally, it supports 114,000 jobs.

York’s population is rising steadily, which is one reason for the significant under-supply of good, affordable accommodation, and for the exceptionally high rates of rental demand. The city’s population is currently 6

£3.7BN &

36,000 JOBS ARE AIMED TO BE DELIVERED BY 2036

A CITY ECONOMY WORTH

£5bN SUPPORTING 114,000 JOBS

£220M

SPENT ON BUSINESS & INFRASTRUCTURE INVESTMENT BETWEEN

2014-2020

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estimated to be 209,900 but the city council expects

help to secure £2.4 billion of sub-regional investment

that by 2032, it could rise as high as 232,000. Student

over the next 30 years.

numbers are rising steadily but the largest growth demographic is older people; in the next five years alone,

Equally importantly, York is supported by West

the older adult population is predicted to rise by approx-

Yorkshire Combined Authority and Leeds City Region

imately 10%.

Enterprise Partnership. The two agencies have been working together to develop a far-reaching Strategic

Fortunately, the city’s economy is growing, too. York

Economic Plan, which aims “to deliver an extra 36,000

is located in an area supported by the York and North

jobs and £3.7 billion of economic output by 2036.”

Yorkshire Local Enterprise Partnership, which is currently bidding into the government’s £900 million

In short, the economy is driving forward at an

Getting Building Fund, which aims to boost economic

impressive pace, and all the ingredients are in place

recovery in the wake of the Covid-19 pandemic. Between

for reliable rental demand, rising capital values and

2014 and 2020, the LEP has spent over £220 million on

strong, dependable yields.

business and infrastructure investments, and it is now developing proposals for a devolution deal, which could 7

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INWARD INVESTMENT IN YORK

£ 2 b n in v e sted in tr a n s p o r t & ho u s in g

York is benefiting from inward investment and infrastructure development at both the local and regional levels. For example, West Yorkshire Combined Authority notes that “We are currently investing around £2 billion, working with our partner councils to deliver better transport and housing, regenerate our towns and cities and protect our environment.”

WYCA also notes that a successful devolution deal could yield benefits including: • £38 million for 30 years via the West Yorkshire Investment Fund •

Access to a new five-year integrated transport

settlement • £317 million from the Transforming Cities Fund to 8

improve public and sustainable transport • Control of the £63 million annual Adult Education Budget for West Yorkshire Connectivity is an important local priority. York and North Yorkshire LEP’s annual report for 2020 notes that: “Transport investment is connecting our places, unlocking future housing and economic growth opportunities across the region. We have invested more than £70 million of Local Growth Fund (LGF) to enhance major junctions and build new roads to open up sites for development.”

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ed in housing Investment is also extending to the development of skills. The LEP has spent nearly £50 million on skills and training since 2014, and the two universities are now funding local projects worth nearly £150 million.

Similarly, in March 2020, the UK Government announced that York would benefit from a share of a £179 million fund designed to promote research into science and technology. The Gov.uk website notes that “the Doctoral Training Partnerships (DTPs) will be managed by the Engineering and Physical Sciences Research Council (EPSRC)” and that York

University of York, it will focus on developing sustainable and efficient chemical manufacturing .

Many other significant investment projects are now taking place in and around York. However, perhaps the most significant of them all is the proposed York Central scheme.

will host one of four pilot schemes. Supported by the

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45 hec ta r e s

One of the UK’s largest and most exciting brownfield regeneration sites at 45 hectares.

2,500

Up to 2,500 new homes to be built on brownfield land.

HS2

YORK CENTRAL MASTERPLAN

YOR CENT PROJ

Future infrastructure growth with HS2 and Northern Powerhouse Rail enhancing connectivity.

112,000m 2

Up to 112,000m2 of commercial space, including high-quality office accommodation.

The City of York describes York Central as a major mixeduse development “planned for one of the largest brownfield sites in the United Kingdom.” Situated beside York Railway Station, the multi-million-pound scheme is expected to grow the economy by 20%. Given that the economy is already worth over £5 billion, this amounts to more than £1 billion of extra activity every year, so the implications for local supply chain businesses and job creation are immense.

Planning consent was granted in March 2019, and the proposals entail the creation of up to 112,000m2 of office, leisure and retail space within a specially designated enterprise zone. Partners include the City Council, 10

Network Rail and the National Railway Museum, amongst others.

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Size: 45 ha

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Completion: March 2030

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Job creation target: 6,500

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Funding: £77 million secured to date

The draft York Central Masterplan includes a provision for “smaller, flexible workspaces for

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Excellent public transport connections at the heart of the UK rail network.

£1.16bn

RK TRAL JECT

£155m

6,500+

To the economy (GVA)

Public investment to deliver key infrastructure.

FTE high value jobs in industries such as professional services, insurance and high value rail.

Source: yorkcentral.info

smaller businesses and other uses including hotels,

Planners see important strategic potential in the development.

a number of shops, bars and cafés … with spaces for

First, the masterplan notes that it is expected to add to the

creative activities.” Plans also include the expansion

city’s tourism offer. “Proposals for the National Railway Museum

of the Railway Museum and “a new western entrance

will see a significant improvement in the cultural offer which

to the station and concourse to … support the future

could increase the length of time that people stay in the city.”

expansion of rail services through the station.”

Other developments include a new park and square,

Second, it could help York to consolidate its position as a UK

educational facilities, and a western access road

centre of excellence in railway engineering. We’ll consider these

into the site supported by a series of improved

and other key growth sectors in the following section.

pedestrian and cycle connections.

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BUSINESS GROWTH IN YORK Despite its history, York has established itself as a centre

This is significant for property investors because if more

for several high-tech industries and growth sectors with

local people take up more professional, higher-paid jobs,

a dependable future. In a report dated September 2019,

so the average spending power of tenants improves.

York Council wrote that the city had distinct strengths in a

This helps to boost demand for higher quality rental

range of sectors including:

accommodation, while a general improvement in living standards can also help to fuel an upward movement in

•

Rail engineering

average house prices.

• Digital-tech • Bioscience •

Financial and professional services

Growth in these knowledge-based sectors is underpinned by a well-qualified populace. The council notes that “just under half of York’s residents are qualified to degree level our higher, meaning that the city has the highest skills levels of any city in the north of England.”

£4.8bn

5th Highest York has the 5th highest proportion of commuting to work by cycling in the UK.

worth of goods & services are produced in York.

21,000 York residents work outside of York

26,000

non-York residents work in York.

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A well connected city to the rest of the UK, with direct links to Manchester, Sheffield, Leeds, Edinburgh, Newcastle & Birmingham.

2.5%

economic growth projected on average each year for the next 15 years.

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Environmental Technologies Sustainability is big business in York, which aims to be part

This, of course, is an aspiration that sits comfortably

of a carbon-neutral region by 2038. A February 2020 report

alongside large-scale infrastructure spending on new rail

by West Yorkshire Combined Authority suggested that

and cycle-way improvements. Of the £70 million spent by

adopting a circular, ‘green economy’ could help to create

the LEP on transport improvements, more than £9 million

100,000 jobs in West Yorkshire by 2030, and create £11

has been used to double the number of trains between

billion in GVA. It believes that the low carbon economy could

Harrogate and York, and a further £1.35 million has been

grow 11% per annum to 2030, “four times faster than the

spent on electric vehicle charging points and a new ‘York

projected growth of the economy as a whole.”

HyperHub’.

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The LEP also regards what it calls its “natural capital

A recent LEP-commissioned report sought to quantify the

economy” as a major driver of growth. It notes that “as

value of natural capital to the York and North Yorkshire

we leave the Common Agricultural Policy … we will grasp

economy. It estimated that value at £20 billion, which

the opportunity to make best use of our natural assets

amounts to nearly 11% of total GVA. Working from this

to generate new income streams from waste, renewable

baseline, the LEP is working “to grow our natural capital

raw materials, carbon capture, flood management and

economy by 31% by 2050,” which would be equivalent to an

biodiversity.”

economic gain of £946 million per annum.

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Railway Engineering & Digital Tech York Council has noted that “York’s enviable connectivity as

This is a realistic aspiration, considering that York

a major rail hub is matched digitally with the city having the

already employs 5,000 railway engineering workers

fastest digital connections in the UK.”

(around 10% of the national total) and two-thirds of all rail jobs in Yorkshire and the Humber.

Given these strengths, planners have seen real potential in York Central as a springboard for further growth. They

Moreover, the city’s academic research in computer

note: “York Central can be the new physical home for the

science is helping to make it a logical base for

city’s rail engineering sector. York is a key hub for the UK’s

technology businesses. The council observes that

rail industry. York Central can provide a physical hub for

“a strong synergy currently exists between rail

the industry to cluster itself around, creating a business

engineering and the digital tech sector, with growing

ecosystem that drives innovation and positions York at the

expertise around signalling innovation, all against

heart of the UK’s rail industry.”

a pressing national need to digitise the railway network.”

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York’s Tourism Market No examination of York’s economic strengths would be complete without mentioning tourism.

The sector has been badly affected by the Covid-19 pandemic, as it has in most other popular tourist cities, but the underlying trend has been one of steady growth.

In 2015, VisitYork.org reported that the city had welcomed 6.9 million visitors that year,

expansion of the city’s tourism sector is clearly good news

attracting £564 million of expenditure and

for property investors. It helps to drive up demand for rental

supporting 19,000 jobs. Four years later – in 2019

accommodation, particularly in the potentially lucrative short-

– it reported a pronounced improvement:

stay sector.

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Visitors:

8.4 million (+1.5 million)

Moreover, as a ‘city break’ destination, York sees steadier

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Expenditure:

£765 million (+ £210

year-round tourism than many coastal towns and properties in national parks, so it tends to deliver higher rates of occupancy.

million) •

Jobs: 24,400 (+5,400)

In 2019, occupancy rates in York reached an all-time high of 80.3% across the whole year.

Like employment and population growth, the 17

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HS2 York will be one of the British cities directly benefiting from

the new line will speed connections.

HS2. The eastern spur of the line will connect with existing rail infrastructure, so HS2 trains will serve York station and

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East Midlands Hub, HS2 time 35 minutes

stops as far north as Newcastle. The new line will make

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Birmingham, HS2 time 57 minutes / current time 112

York more readily accessible to tourists and will enable

minutes

York’s Railway Museum to multiply the benefits of its own

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London, HS2 time 84 minutes / current time 111 minutes

£50 million masterplan. HS2 gives some examples of how

HS2 Line (Phase One)

Glasgow

Edinburgh

HS2 Line (Phase 2a) HS2 Line (Phase 2b) HS2 Services on existing network

Carstairs

New Station (Phase One)

Lockerbie Newcastle

New Station (Phase 2b)

Carlisle Durham Penrith

Destinations served by HS2 services on existing network

Darlington

Oxenholme

Lancaster Manchester Piccadilly

Preston

Leeds

York

Wigan Sheffield Midland

Liverpool

Manchester Airport

Runcorn Crewe

Stafford Birmingham Curzon Street

Chesterfield East Midlands Hub

Birmingham Interchange

Old Oak Common

London Euston

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COVID RECOVERY PLAN Across the UK, tourism, retail and many other sectors have been hard-hit by the Covid-19 pandemic. However, York was quick to introduce an economic recovery plan.

The funding helped to secure jobs and productivity In May 2020, City of York Council formed 12 recovery

during a difficult period. Then, in September

group panels, consisting of representatives of (amongst

2020, York and North Yorkshire Local Enterprise

others) small business, educational establishments,

Partnership put together a funding application to

manufacturers and badly-hit sectors including hospitality,

central government, seeking a share of its £900

tourism, retail and the creative arts.

million Getting Building Fund. The pot could be worth up to £15.4 million, spread across 10 regional

Council leader Councillor Keith Aspden noted that the

projects, and should help to safeguard businesses

council had “moved swiftly to deliver over £100 million in

and workers against the worst of the winter

support, developed our own £1 million grant scheme to

pandemic.

help those falling through the gaps … and successfully lobbied government to support our 12,000 self-employed.”

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£250,000 3% YORKS AVERAGE HOUSE PRICE

YEAR ON YEAR

2.5%19.4% 12% 18% AVERAGE GAIN (UK)

YORKS AVERAGE CAPITAL AVERAGE 5 YEAR GAIN GAIN YORK AVERAGE 5

YEAR GAINS IN UK

YEAR ON YEAR

CHANGE IN TENANT DEMAND (YORK)

AVERAGE RENT £830pc Zoopla’s report also found that annual rents rose by 4.5% in York between July 2019 and July 2020, which far surpassed the mean figure for the whole of the UK. Data from Home.co.uk broadly agrees. Its October 2020 data

YORKS HOUSING MARKET

puts the median rent for York at £895 pcm rather than £830

By any measure, York’s property market must look

LiveYield publishes a regularly updated table of rental yield data

attractive to investors, even before the effects of all

for York. At the time of writing (October 2020), it showed that

the ongoing regeneration and developments works

yields in the top 10 York postcodes ranged from 4.3% to 5.5%.

but the overall pattern is similar. The company also found that median asking prices had risen around 2%, but asking prices for smaller units had gained more: 3% for 1-bedroom properties, and 6% for those with 2 bedrooms.

start to be felt.

Clearly, then, buy-to-let rental properties in York are tending to In September 2020, figures published by Zoopla

deliver rewarding returns and to outperform national norms. As

found that demand for accommodation in York had

major developments such as York Central start to take effect,

risen by a massive 28% over the previous 12 months.

rental demand should only increase and investors should see

Findings from the same report included:

even better returns in the years ahead.

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THE UNIVERSITY OF YORK, CENTRAL HALL

YORK ST JOHN UNIVERSITY

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THE UNIVERSITY OF YORK, KING’S MANOR

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THE STUDENT PROPERTY MARKET IN YORK York has two universities: the University of York and

Student rental demand is robust, predictable and rising,

York St John University. Collectively, they sustain a

year-on-year. For example, in 2015/16, the student roll

community of around 40,000 undergraduates, post-grads

at the University of York stood at 16,390, while in the

and researchers. They are also important employers

academic year 2019/20, it had risen to 18,930. There is

and investors in the city. Currently, for example, the

therefore a healthy student rental market within the city,

University of York is in the process of developing a new

though yields vary considerably by location and property

£130 million campus.

type.

PROPERTY MARKET PREDICTIONS Given the present uncertainties surrounding Covid-19

governing the property market. Fortunately, in all the

and the consequences of Brexit, many commentators

respects that matter, York is faring very well.

are understandably reluctant to offer any predictions for 2021 and beyond.

The city is already witnessing exceptionally strong rental demand, and this should only strengthen as employment

There are few, if any, credible predictions for York itself,

numbers and the local population grow. Similarly, York’s

but Savills expects to see prices in Yorkshire and Humber

resilient economy, coupled with large new investments

rise by 24.1% by the end of 2024. That compares to a UK

and a growing emphasis on higher skills, should all help to

average of 20.4% over the same 5-year period. Hamptons

underpin rising living standards and average disposable

International’s 4-year forecast expects Yorkshire and

incomes. In turn, these factors should help to support

Humber to see gains of 10.5% by the final quarter of 2023.

rising rental values and sustained capital growth for many years to come.

In the absence of more specific predictions, investors can only focus on the fundamental economic forces

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WE LOOK FORWARD TO HEARING FROM YOU For more in depth information in relation to property investment in York, or if you’re just looking for some professional advice, please contact our office, visit our website or drop us an email, you can also visit us at our brand new offices. Please use the details below.

Are team of professionals are here to help in any way possible, please don’t hesitate to get in touch.

We look forward to hearing from you.

Kinnerton House Bell Meadow Cuckoos Nest Pulford Chester CH4 9EP 01244 34 33 55 sales@residential-estates.co.uk www.residential-estates.co.uk

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