According to HM Land Registry the average house price in England and Wales rose by just over 1% last month at £181,619, finally surpassing the previous high of £180,983 back in the boom days of November 2007.
But this time we’re in a more stable position than the boom, with prices having edged up slowly but steadily representing an annual rise this year of 5.4%. This is by no means spectacular, but it does show once again that property remains a good long term investment overall – unless of course you happened to buy at the top of the market in 2007! Overall however, look at any graph from any house price index source and you will see that booms and busts are relatively minor spikes in what it otherwise a healthy upward trend.
Of course, if you are a property investor then any capital appreciation is the icing on the cake on top of your net rental yield which has typically been around 5% rising to 15% when leveraged through a mortgage and can even rise to over 20% for specialist HMO (Houses in Multiple Occupation) properties. (Source Association of Residential Letting Agents). Do bear in mind however that the tax burden on investors increased during last month’s budget, when the Chancellor slashed the tax relief that private landlords receive on their mortgage interest payments, cutting it from 40pc or 45pc to 20pc by April 2020.
In terms of predicting the short term future, it’s worth looking at asking price activity. Rightmove’s July index suggested virtually no change whatsoever from the previous month, with a marginal 0.1% rise in asking price coupled with the same level of supply averaging 65 properties per agent, selling on average in 65 days. The average asking price is now £292,284. Is this possibly the beginning of a short period of flat-lining? Although our own summer activity has been impressive, the national scenario suggests an acute lack of supply in relation to buyer demand, with 10.6% fewer homes available coupled with a 22% increase in buyer demand. Whilst this might on the surface suggest a price hike may be imminent the market is fickle and is still highly reliant on mortgage availability. Talk of interest rate and inflation rises around the corner might also take the edge off demand.
Locally property is certainly selling, and the summer holidays are nothing more than a minor inconvenience to the serious house-hunter. If you are considering a sale then it might just be worth putting your property on the market sooner rather than later and take advantage of strong demand during the autumn as nobody quite knows what the winter might hold.
Needless to say, whether you’re buying or selling, please do contact us for free and up-to-the-minute marketing advice.