Property Investment in York

Your Free Guide to Property Investment in 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 our downloadable guide, we examine some of the reasons for this, including:

  • York’s economy

  • Inward investment in York

  • York Central

  • Business growth

  • Environmental technologies

  • Railway engineering

  • York’s tourism market

  • Covid recovery plan

  • York’s housing market

  • Buy-to-let investment in York

  • The student property market in York

  • Predictions for the buy-to-let market in York

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Download our Free Guide to Property Investment in York

York – An Overview

York is benefiting from inward investment and infrastructure development at both the local and regional levels. West Yorkshire Combined Authority notes that it is investing around £2 billion in transport, housing, and urban regeneration. Through a successful devolution deal and other developments, York could benefit from:

  • £38 million for 30 years via the West Yorkshire Investment

  • Fund Access to a new five-year integrated transport settlement

  • £317 million to improve public and sustainable transport

  • Control of the £63 million annual Adult Education Budget

  • More than £70 million of road improvements

  • Nearly £150 of investment by its two universities

  • A share of a £179 million fund designed to promote research into science and technology. (The Doctoral Training Partnerships scheme.)

Connectivity is an important local priority; York and North Yorkshire has invested more than £70 million in road improvements that will open up new areas for development. It has also spent nearly £50 million on skills and training since 2014, and the two universities are now funding local projects worth nearly £150 million.

York could also benefit from a share of a £179 million fund designed to promote research into science and technology. The city will host one of four pilots under the Doctoral Training Partnerships scheme, under which the University of York will focus on developing processes for more sustainable and efficient chemical manufacturing.

York Central

York Central is a major mixed-use development on one of the largest brownfield sites in the UK. Planning consent was granted in March 2019. Situated beside York Railway Station, it will have its own designated enterprise zone and it is expected to grow the economy by 20%. This equates to over £1.1 billion GVA. The implications for local supply chain businesses and job creation are immense.

  • Size:  45 Ha

  • Office & leisure space:  112,000m2

  • Completion:  March 2030

  • Job creation target: 6,500

  • Funding:  £132 million secured to date

The scheme will support the £50 million plan to expand the National Railway Museum. Works will include a new western entrance to the station; a new park and square; educational facilities; and a western access road, supported by a series of improved pedestrian and cycle connections. The works will boost the city’s tourism offer and should consolidate York’s position as a UK centre of excellence in railway engineering.

Location: North Yorkshire

  • Economy: circa £5 billion

  • Employment: 114,000

  • Population: 202,800

  • Population growth: up to 232,000 by 2032

  • Universities: 2

  • Student population: 40,000

York is located in an area supported by the York and North Yorkshire Local Enterprise Partnership, which announced its proposals for a devolution deal in August 2022. This could potentially secure up to £2.4 billion of sub-regional investment over the next 30 years, with the first funding being allocated in autumn 2023.

Equally importantly, York is supported by West Yorkshire Combined Authority and Leeds City Region Enterprise Partnership. The two agencies have been working together to develop a far-reaching Strategic Economic Plan, which aims “to deliver an extra 36,000 jobs and £3.7 billion of economic output by 2036.”

Inward Investment in York

Business Growth in York

Despite its history, York has established itself as a centre for several high-value, high-growth industries. These include:

  • Railway engineering

  • Digital-tech

  • Bioscience

  • Financial and professional services

  • Environmental technologies

  • Tourism

Growth is underpinned by a well-qualified populace. The City 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.”

As more workers take up more professional, higher-paid jobs, so average disposable incomes will tend to improve. This generally correlates with higher demand for quality rental accommodation, and upward movement in average house prices.

Environmental Technologies

West Yorkshire Combined Authority has suggested that adopting a circular, ‘green economy’ could help to create 100,000 jobs in West Yorkshire by 2030, and create £11 billion in GVA. It predicts that the low carbon economy could grow 11% per annum to 2030, “four times faster than the projected growth of the economy as a whole.”

The LEP agrees. It sees its “natural capital economy” as a major driver of growth. It estimates its value at £20 billion, and seeks grow the sector by 31% by 2050. That would equate to an extra £946 million per annum.

Railway Engineering & Digital Tech

Planners have seen real potential in York Central as a springboard for further growth. They note: “York Central can be the new physical home for the city’s rail engineering sector. York is a key hub for the UK’s rail industry. York Central can provide a physical hub for the industry to cluster itself around.”

Moreover, the city’s leading research in computer science is helping to make it a logical base for technology businesses. The council observes that “a strong synergy currently exists between rail engineering and the digital tech sector, with growing expertise around signalling innovation.”

York’s Tourism Market

York’s tourism 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, attracting £564 million of expenditure and supporting 19,000 jobs. Four years later – in 2019 – it reported a pronounced improvement:

  • Visitors:                8.4 million (+1.5 million)

  • Expenditure:       £765 million (+ £210 million)

  • Jobs:                       24,400 (+5,400)

Like employment and population growth, the expansion of the city’s tourism sector is good news for property investors. It helps to drive up demand for rental accommodation, particularly in the potentially lucrative short-stay sector. Moreover, as a ‘city break’ destination, York sees steadier year-round tourism than many coastal towns and properties in national parks, so it tends to deliver higher rates of occupancy. In 2019, occupancy rates in York reached an all-time high of 80.3% across the whole year.

HS2

York will be one of the British cities directly benefiting from HS2. High speed trains will serve York station, making the city more readily accessible to tourists and business visitors. HS2 gives some examples of how the new line will speed connections.

East Midlands Hub, HS2 time 35 minutes

Birmingham, HS2 time 57 minutes / current time 112 minutes

London, HS2 time 84 minutes / current time 111 minutes

Covid Recovery Plan

In May 2020, the City of York Council devised a Covid recovery plan and formed 12 recovery group panels, comprising representatives of key industry sectors. Council leader Councillor Keith Aspden noted that the council had provided over £100 million in support and developed its own £1 million grant scheme to help those falling through the gaps.”

Then, in September 2020, York and North Yorkshire Local Enterprise Partnership put together a funding application to central government, seeking a share of its £900 million Getting Building Fund. The pot could be worth up to £15.4 million, spread across 10 regional projects, and should help to safeguard businesses and workers against the worst of the winter pandemic.

York’s Housing Market

In September 2020, figures published by Zoopla found that demand for accommodation in York had risen by a massive 28% over the previous 12 months. Findings from the same report included:

  • Average house price (York):                      £250,000

  • Average capital gain (York):                      3% year-on-year

  • Average gain (UK):                                       2.5%

  • Average 5-year gains (York):                    19.4%

  • Average 5-year gains (UK):                       18%

  • Change in tenant demand (York):          12% year-on year

  • Average rent (York):                                    £830 pcm

  • Average annual rent rise (York):             4.5% (year-on year to July 2020)

  • Average yields (York):                                 4.3% to 5.5% by postcode

Data from Home.co.uk 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.

The Student Property Market in York

York has two universities: the University of York and York St John University. Collectively, they sustain a community of around 40,000 undergraduates, post-grads and researchers. They are also important employers and investors in the city. Currently, the University of York is developing a new £130 million campus.

Student rental demand is robust, predictable and rising, year-on-year. Between 2016 and 2020, the student roll at the University of York increased by 2,540. There is a healthy student rental market within the city, though yields vary considerably by location and property type.

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