Cost of climbing property ladder

CALLING it a dream house would be an understatement. For most of us, Middlethorpe Manor is beyond our wildest dreams. The former residence of confectioner Sir Francis Terry is indeed a home, sweet home. With multiple bedrooms, several bathrooms, a billiard room, a bar room, a vaulted wine cellar and a leisure complex with indoor swimming pool, it must be one of the most desirable properties in York.

And that's before you mention the 5 acres of garden and its historical connections with the famous Terry family.

Mere millionaires need not apply. At a guide price of £2.5 million, only multi-millionaires are in the frame.

It's not every day that such a prestigious pile comes on the market. But neither is it unheard of. The estate agent handling that sale, FPD Savills, also has a Harrogate property worth £3 million on its books.

Meanwhile, a glance through Property Press any Thursday reveals that six-figure homes are now commonplace. York has always been a popular place to live, but this year its property stock has soared to new heights. This can partly be explained by increasing prosperity in York itself. More people are moving to the city to take up jobs in the science and financial sectors, pushing prices up.

Meanwhile, neighbouring Leeds is booming. The opening of the A1 (M) link road cut journey times between the two cities, and more people are choosing to work in Leeds but live in York.

Consequently, York house prices rose dramatically for much of 2000. In August, the Land Registry reported that they had leapt by a quarter in a single year. That took the average price of a home from £67,920 last summer to £84,894 this.

Although the housing market has cooled in recent weeks, there is still great demand for York properties. Nigel Naish, of Nigel Naish & Company, has a range of six-figure properties on his books, and he is always looking for more.

He was not surprised by the Middlethorpe Manor price tag.

"One of the peculiarities of the York area is that, in such an historical city with a population of nearly 200,000, there are remarkably few bigger houses," he said. "So many of them are now schools or offices.

"Anything that is a quality period property with land will make these sorts of huge figures."

Mr Naish said York's excellent communications, plus the "feel-good factor" of living here have driven prices up. It's a good time to be an estate agent.

"It would be wrong to suggest we had a flood of inquiries. But there are a steady stream of positive inquiries from well-heeled people."

Those moving north, who have made a killing on their property sale in London, are competing with wealthier northerners for the better properties.

But it's not only people living in York's bigger houses who have reason to smile. The price of terraced properties in the right areas has also shot up. In the first quarter of this year, more of these homes were sold than any other type. And prices are still rising in streets near the soon-to-be-opened Millennium Bridge that links Fulford with South Bank.

Almost every type of home has benefited from the property boom, from the terraced houses originally built for Terry's factory workers to the manor house where Sir Francis Terry himself once lived.

But the market has created an ever-widening gulf between the property haves and have nots. Those not already on the property ladder are finding it increasingly hard to get a foothold, according to Jenny Brierley, director of the York Housing Association.

"It was already difficult for people on low incomes, whether they are trying to buy or trying to rent.

"People on low incomes trying to buy for the first time will find that the bottom rung on the housing ladder is out of their reach."

Private rents are also increasing in line with the value of houses, she said. As a result, more people are turning to housing authorities for affordable accommodation in York, a trend "not necessarily shared by other cities in the North of England".

"You don't need to be a great mathematician to work out what income you need to buy houses at the latest prices being charged in York.

"You need a fair income and a steady income in order to do that."

Many first-time buyers are struggling to find anything in their price range. In August, the GMB union revealed that vital staff such as school teachers and hospital porters were finding it increasingly difficult to afford houses in York.

So what is the answer? Subsidised, affordable housing is part of the answer.

"And I think we need to make sure we make the best possible use of the stock we have got with owners making sure their empty properties are brought into use."

House prices seem to have a life of their own. According to the Nationwide price index, a Yorkshire house that cost £30,000 in 1980 would now cost £82,000, a rise of 173 per cent.

It gets even more scary when you home in on York. In 1975, a four bedroom detached Haxby house was advertised for £16,000; a similar property in last week's Property Press was up for £180,000. Do a similar comparison for a terraced house in Nunmill Street, and the figure goes up from £6,950 to £90,000.

But you have to be careful with such simplistic figures, asserts Dave Rhodes, researcher at the Centre for Housing Policy at York University. After all, incomes have also risen sharply: a building society cashier 25 years ago would earn a salary of £1,600, a hospital pharmacy assistant £27 a week.

And there are many different housing markets within York, Mr Rhodes points out. Demand for student accommodation in the Groves, for example, has led to private landlords buying houses and pushing prices beyond many locals.

But the market will readjust. If properties are not affordable, prices will come down, he said, a trend that has already begun in some parts of York.

Alas, however, Middlethorpe Manor's price tag is unlikely to drop. Anyone got a spare two-and-a-half mill?