North Yorkshire is home to some beautiful towns, and Harrogate is certainly one of them.
This affluent location is full of independent shops, cafes and restaurants while also being within easy reach of Leeds and York. It’s considered a safe town, which makes it great for securing cheap home insurance, raising children, and encouraging investment that leads to employment opportunities.
Nidderdale Area of Outstanding Natural Beauty, the Yorkshire Dales and the North York Moors are all just a short drive away too, so it’s easy to see why property in Harrogate is so highly sought after.
Demand dynamics
The population of Harrogate grew by 3% between 2011 and 2021, which was less than the overall population of England in the same period (6.6%). The median age of the town’s residents is higher than average at 47, with around 46% of the population being aged 50 or above.
Homeownership was down in the previous census while there were increases in social and private renting. And with a nominal average property price (£394,000) that was £44,000 higher than the rest of the country in 2023, it seems unlikely that demand from existing residents will spike.
Economic indicators
Harrogate has experienced a boom in its tourism industry, with visitors contributing £31 million more to the local economy in 2022 than they did in 2019. This can help keep employment and income levels high, with the latter showing signs of a recovery after a minor dip during the pandemic.
This should eventually reinforce purchasing power and send demand upwards, but this is unlikely to happen in a short space of time.
External influences
One of the main reasons for housing prices falling over the past year has been the increase in interest rates and rising inflation. These made it far less affordable to buy a home.
However, house prices in January were at their highest in a year. And with inflation having come down and the expectation that interest rates will be cut, demand is bound to see an uptick.
Housing market activity
According to Plumplot, only 2% of properties purchased in Harrogate last year were new builds. If supply fails to keep up with demand, this could lead to an increase in house prices.
One in five properties sold in Harrogate in 2023 went for £500,000 or more, and the proportion of houses selling for £250,000 or less has significantly reduced over the past 20 years.
In conclusion
There’s every chance that house prices in Harrogate could rise in 2024 due to a lack of new builds and the potential for interest rates to be cut, making mortgages more affordable.
