Keep Buying: House Price Growth Sign Of Healthy, Growing Economy


House prices continue to rise in the UK. In London, prices have risen 11%, whilst in Cambridge and Bristol, 13% and 14% rises have been observed, respectively. Supply and demand is driving the rise. Behind the demand are several factors, including a rising divorce rate, which are creating the need for more single-person homes; as well as immigration and population growth.

Another reason for the price rise in UK homes is a combination of simple confidence and self-fulfilling prophecy. When people expect prices to rise, this causes increases to become a reality, causing even more confidence that prices will increase. Today’s reality is that market activity remains robust, despite predictions of a sudden drop due to economic uncertainty.

A Wealthier Feeling

Although higher house prices may seem like a negative thing, they are actually indicative of many positive occurrences. For example, higher house prices are a direct reflection of buyer confidence in their own financial stability. When a buyer feels wealthy and confident, they will spend more.

Homeowners can reap many benefits, including feeling as though they own a valuable asset, which they do. They can also ensure that this valuable asset benefits them well into retirement; when it’s time to downsize to a smaller home, the extra money from the sale can fund their retirement, or they can choose to enter an equity release scheme to produce needed cash.

Economic Resilience

Rising house prices mean that businesses are thriving. A higher turnover among small and medium sized enterprises in some UK cities has made them more prosperous. As well, this appears to be growing year on year. Another sign of economic resilience is coming from the charitable sector, which is experiencing a notable rise in charitable giving.

More Housing

As demand for homes in Nottinghamshire continues to increase, so too will the supply. Construction companies may need to hire more people to meet this demand, as well as obtain more materials, which fuels the growth of those businesses who supply the construction sector. More jobs and purchases only serve to strengthen the economy further, as well as address the severe housing shortage.

A Higher Return for Sellers

With demand for homes being higher than ever, sellers have a golden opportunity to get the best price for their homes. This is also a good time to either downsize by buying a smaller home, or purchase that dream home. Regardless what option is chosen, homeowners have the opportunity to spend their additional money on more assets or invest it, either of which will serve to increase personal wealth.

Lower Interest Rates Help

The Bank of England recently halved its interest rate from 0.5% to 0.25%, which has also significantly affected consumer spending. With such low rates, homeowners can increase their security by locking in a low rate. As well, these low rates mean that buyers can take their time to choose the best home for them, which translates into long-term security and a confidence boost.

The current housing market means that homeowners are in an ideal position to maximise their savings, whether they choose to do so by purchasing a smaller home, or by using the acquired value from a home sale to purchase additional investment products or assets.

House Prices Slow Down But Are Still On the Increase

House Prices Slow Down But Are Still On the Increase

In the UK, property prices have been rising steadily for several years. One prediction is that just a decade from now, prices may be as much as 50% higher than they are currently. Although this seems like a lot, the fact that house prices rose an average 7.82% between 2013 and 2014 make that 50% seem far more likely to be reached less than ten years from now.

In the Midlands and the North of England, property prices are steadily slowing, meaning that in 10 years, the price of a property in London could easily reach a million pounds. Meanwhile in England’s South and East, property prices continue to accelerate. And amid all of these numbers, it seems that the benefits of investing in property in Nottinghamshire have gone largely ignored. There are actually many reasons for investing in property now.

The East Midlands Property Market Remains Lucrative

The UK’s property market is a primary driving force for the economy, and has always been a risky venture with all manner of peaks and valleys to prepare yourself for. But, it remains a lucrative venture, especially in the East Midlands, even if you only plan to invest in one property. Combined with low mortgage rates, this generates the perfect conditions for successful investing.

Tenant Demand on the Rise

For those looking to start a property business, a by-product of the continuing rise in house prices, as well as a desired change in lifestyle, are causing more and more individuals to look for lower payments by pursuing home and flat rentals. All told, the increase in tenant demand has been significant, with an average of five people competing for a single rental property. This increase is expected to continue.

As well, the increasing mobility of the workforce is seeing a higher number of people looking to share accommodation, which is both more affordable and allows for more money to be saved for a large property or other purchase in the future.

Benefits of Investing in Property

There are many benefits to property investment. Not only can you run a property business from anywhere in the world, but you can enjoy sustainable business growth that’s also profitable. As well, rents are currently at their highest in this country, which means ever-climbing yields for property owners.

For those looking to begin a property business, both direct and indirect investments are available. A collective property fund can allow would-be business owners to own property without the high cost. This is done by entering a pool of investors, from which a professional manager collects money and then invested into shares of property or in the property directly. Collective funds are available in many forms, including property unit trusts, REITs (real estate investment trusts) and offshore property companies.

Those who wish to purchase property for themselves can also enjoy many benefits. As current numbers predict, the value of a home will only increase over the coming years, which can mean a large return if the property is sold.

Is this information Enough to make a Decision?

Although the numbers are in, predictions about the property market have been made and the many benefits of property investing remain, some will inevitably wonder when is the best time to take the property investment plunge.

The truth is that now is as good a time as any to invest. But whether or not you do so is an individual decision. Investing in property does involve taking risks, but the key is to be satisfied with the level of risk being assumed, as well as to be able to manage that risk.

Property investment is not something that should be entered into lightly. Much consideration needs to be made before making the decision to invest. It may be that you need a professional to help you determine the best course of action before going forward.