subject: Predicting The Best Places To Invest In Residential Property [print this page] Predicting The Best Places To Invest In Residential Property
Well the UK property market is certainly grabbing all the headlines at the moment, what with residential and commercial mortgage, restrictions and plummeting property prices. According to data released by the Land Registry, the property prices underwent their largest monthly drop in October 2010 in three years. An influx of homeowners looking to sell up before the notoriously quiet festive period undoubtedly contributed to this fall. Furthermore, RightMove, one of the UK's leading property websites, reported that as of November 2010, desperate homeowners had slashed their asking prices by a huge 3.2 per cent. Not pleasant reading I'm sure you'll agree.However, despite these cuts, house prices as a whole have been nervously increasing again since their record low levels at the end of 2007, but are still nowhere near to returning to their pre-recession levels. According to Nationwide's Third Quarter Report, this increase has substantially weakened towards the end of this year, which does not bode well as we enter the New Year. The aim here is to look at the most significant property price increases in the UK over the past few years and what this means for the property market in 2011.The first, most obvious trend to notice, which I'm sure won't come as a surprise to you, is that the largest property price increases between October 2009 and October 2010 was in the Capital city, London. And this wasn't just in central London, every single borough of the totalling 33 saw property rises, the highest being seen in Redbridge where the average increase was +10.2%. As a region, The Capital saw prices rise from an average 316,943 in October 2009 to 341,105 in the second half of 2010. When comparing these with the top property tycoons that have the biggest presence in London, it is clear that underpinning this growth is international buyers looking to make secure investments in properties outside of the crumbling Eurozone.Property website LSL Property Service/Acadametrics figures showed November 2010 saw the highest average price yet for London at 383,243, the fourth month in a row a peak was reached in 2010. While it might seem out of control to most people, the websites statistics also show the rate of growth is decreasing in London also, in line with the rest of the British property market.One of the main reasons for this slow decline in the property market in central London is, ironically, the improvement of the city's transportation facilities. With continuous upgrades being made to the underground system and with the Crossrail service currently being under construction, travelling to and from the city has become much more efficient and relatively hassle free. As a result, commuters are settling down in the quieter towns and cities surrounding the capital and instead just commuting to work.When looking at the rest of England and Wales, the average property price in the North West has actually declined slightly from an average of 118,838 in October 2009 to 117,868. Despite this decline of 970 though, 8 regions in England and Wales have actually seen increases in their average property values over the last year. For example, Merthyr Tydfil in Wales experienced the highest annual price change in October this year with a growth of 10.2% according to the Land Registry Property Index. Similarly, the area of Darlington saw the best monthly growth in England with an increase in the average property price of 3.1%.I think most people assume that the property market in the South has always been stronger than in the North, benefitting largely from it being home to the Capital City. However, these statistics suggest that the property markets throughout the UK have in fact been running at a rather equal rate between the latter half of 2009 and the latter half of 2010. The Property Price Index reveals that the areas of Northumberland and Durham were in fact the main drivers of the UK property market in regards to sales volumes. The former saw an annual growth in property sales of 25.9% while the latter saw a growth of 11.6%.Nationally, the largest price increases on average were last seen in October 2007, so to put it in context, the 2010 average annual rise was 3.4% by October, putting the average price of a UK at 3.4%. What is not talked about often however is how prices are moving when comparing differing housing types. Naturally detached houses saw the largest increase with 4.8% since the fourth quarter of 2009. Next came Semi-detached at 3.3% increase a year with terraced housing bringing up the rear at 2.5%, so no major shocks in that regards I think you'll agree.So what does this mean for the property market in 2011? While a few areas have clearly seen some slight decreases in property prices, the majority of the statistics released by the Land Registry point towards a slow but sure improvement in the UK property market as a whole. This could potential mean a year of growth and further improvement in 2011, fingers crossed of course! Economists at the Centre for Economics and Business Research (CEBR) have implied that these price increases will continue; they have published predictions that London will see a growth of 1.2% and the rest of the UK will see a rise of around 0.8%. So all in all, there is definitely still hope as we enter the New Year!So for anyone who is looking to enter the property market for the first time, or for homeowners looking to move on, then don't despair just yet. While the media is focused on the continuing difficulties within the UK property market, it doesn't mean that finding that dream home is impossible. All the statistics here suggest that living in quieter, suburban areas of all the major cities may well be the best option. With improving transport links, it has never been so easy for commuters to commute to work. Similarly, the desirability factor of living in the quieter areas means that the property markets in those areas are in fact improving with the increasing consumer demand.
