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May 2014 - Sales Property News

Posted on Tuesday, July 15, 2014

Property prices are always going to be one of those issues that gain immediate media attention. Take this from the front of a recent issue of the 'London Evening Standard': 'Housing bubble shows no sign of bursting'.

The article goes on to elaborate: in London, prices have risen 12.4% to an average of £414,490 in the year to March. Homeowners in the capital have seen the value of their properties go up by an average of almost £49,000 in the past 12 months, according to Land Registry figures. Why wouldn't this be the case when the latest financial data shows that the economy has been growing consistently over the last five quarters? 

I often think that all this media coverage about property prices loses sight of one fundamental fact: a house is primarily a home. Over time, it may morph into an asset that generates income or a bequest to your nearest and dearest, but that doesn't alter its prime function. There's not a lot of point in slavishly calculating how much your house is increasing in value, if you don't enjoy the day-to-day experience of living in it.

There's another issue that the media ignore: home ownership has been on the decline since 2003 when it reached its peak of 71%. The latest English housing survey shows that the proportion of homes lived in by owner-occupiers has now dropped to 65.2%: its lowest level since 1987. Currently, London has the highest proportion of renters, accounting for just over half of households in the region. What happens when those London renters reach retirement age? Who's going to be paying their rent then?

What I'm working up to is this: property prices are increasing and will probably continue to do so, but interest rates are low and will probably continue to be so because of the strength of the economy. Now is most emphatically not the time to sit on the fence, particularly while support schemes such as Help to Buy are still on offer. If you want to move onto or up the property ladder and you can afford to do so, then do it now.