Monday, May 14, 2007
Latest Govt DCLG figures: price up 10.9% YoY
Assetz News: Rising house prices are good news for the investor
House prices have continued on what seems like an inexorable upward path in the first few months of 2007 - something that spells good news for the buy-to-let sector. According to the latest official statistics from the Department of Communities and Local Government (DCLG), the average house price in the UK is now £206,890 - a figure that has risen more than £2,000 since February.
The two groups of people hardest hit by the rise in house prices and interest rates are young professionals and first-time buyers. These represent a significant share of the BTL landlord's core market.
An additional benefit from the investor's point of view is that increased house prices mean increased asset value. This means the potfolio owner who decides to sell is almost guaranteed a handsome profit.
17 Comments
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1. little professor said...
A little more objective coverage here:
UK house price inflation falls
14 May 2007
The UK house price inflation rate fell from 11.8 per cent in February 2007 to 10.9 per cent in March 2007, according to the Communities and Local Government (CLG).
Between February and March there was a rise of 1.1 per cent in the prices index of properties bought compared with a larger rise of 2.0 per cent over the same period last year resulting in a decrease in the inflation rate
England, Scotland and Wales all saw decreases in inflation in March 2007. The inflation rate in England fell from 10.7 per cent in February to 9.8 per cent in March; the inflation rate in Scotland fell from 16.6 per cent to 14.8 per cent; in Wales the rate fell from 10.7 per cent to 9.7 per cent. Northern Ireland was the only country where the inflation rate rose, from 48.5 per cent to 50.1 per cent [Ouch!!! That sounds very sustainable....].
House price inflation rose in two of the English regions, remained level in one region and fell in six regions.
The average price paid by first time buyers across the whole of the UK was £157,917 in March, while the average price paid by former owner occupiers was £230,916.
2. royston said...
"House prices have continued on what seems like an inexorable upward path in the first few months of 2007"
Let's get our facts straight. House prices have not simply "continued...on..an..upward path", like its a natural event or an act of god. They have been pushed up by frenzied BTL and BTS speculators.
3. little professor said...
Apologies for the boldness above.
Northern Ireland is clearly going mad:
4. little professor said...
Damn, need to get a closing tag to end the boldness madness. How's that?
5. little professor said...
No, that didn't work. Webmaster, help us!!! I promise I won't try to use fancy HTML ever again!
6. royston said...
30 years of steadily, endlessly, remorselessly declining house prices!....................it's coming, I tell you!
7. Hedgefunded said...
try that
8. sold 2 rent 1 said...
Royston,
30 years is a lot.
10-20 should do it, but HPC will be the least of our worries.
9. enuii said...
I fear something bigger is on the horizon in an economy built on borrowing, falls in the UK's one and only widely held asset spell bad news for everything from the retail sector through to peoples pensions.
10. Scott said...
Who cares enuii. We are British and we thrive on chaos. This "everybody's okay in the bubble" feeling just does not seem right.
11. Smash It Up said...
That's not a news story, it's a press release. Hardly worthy of the front page.
12. glorious sunshine said...
God,
Listen to you lot! You would think the end of the world is coming!
Well it isn't! Everything is great.
Why not get stuck in now before you have no choice but to rent FOREVER???
13. talking rot said...
Glorious Sunshine
Welcome back! It is good to have the alternative view exposed on this site as it stimulates debate and forces us "delusional doomsters" to reassess our arguements. Will you promise me one thing? Will you still be posting in January 2008?
You see, I don't believe there will be a crash in property prices because no one can tell me what a crash is? However, houses are currently over-valued due to the easy availability of credit and intense speculation so property prices will [probably] stagnate for a number of years or drop. If prices are still rising or have leveled out by January 2008 then you have weight to your arguements. Should prices stagnate (which I define as a failure to increase above the RPI rate of inflation) or should prices be declining by January 2008, I would like you to continue posting so you can convince me that it is a temporary abnormality in the ever-increasing market.
Cheers
14. Fatcat said...
My father is 83 yrs old and he told me the other day that' property only goes up it never comes down' .He should know.
15. mrmickey said...
I'm sure property prices in Zimbabwe will keep on going up with inflation at 1000%, this country is no different the more paper money is printed the higher house prices will go, all houses are is a hedge against inflation as Sterling is constantly being devalued.
16. uncle tom said...
Royston & S2R,
A slow steady decline does not fit any of my models.
When the market eventually turns (which will now occur when the BTL sector finally get cold feet and stop adding to their portfolios) the down slope looks almost certain to start slowly, and then steadily gather pace, until it goes into freefall. After hitting a spectacular low - possibly more than 70% below current values - it will then rebound, before levelling at around two thirds current prices - possibly less.
There will be a great buying opportunity at the bottom of the market, but don't count on getting a mortgage at that point, as the lenders will be effectively bankrupt themselves..
17. dohousescrashinthewoods said...
Quite, mrmickey. With RPI at about 5% and property (outside the economic republic[?] of London) rising at between 0% and 4%, it's already on the way down. Even the South East is barely holding its head up at around 7%, which is just 1% above the long term trend of inflation+1%.
If peoples' gut feelings on inflation are to be believed, then London is only just holding value, with everywhere else in decline.
Maybe it's not so sunny after all. Where to now for pensions?