Pay the price to live somewhere nice

As we approach the end of October, thoughts turn to what the future might hold for UK property prices. With signs that the housing market may be slowing down what will 2015 bring? In my view over the next five years we will continue to see growth, although more subdued than in recent times. For 2015 I predict minor growth of 2.9% reflecting a cooling in London with the regions surging onwards. Sadly I won’t know if I’m right for over a year.

The property market is at a turning point. The direction of the market has largely been marching upwards — until recently. Average house prices fell back from a record high in September with the first month-on-month fall in well over a year, the latest Nationwide building society report says.
Reading through the latest Residential Market Survey from RICS it was clear that greater caution was being exercised as house price momentum slowed. It said nationally, new buyer demand slipped for the third consecutive month and in London, caution took a particular toll, with prospective new buyer demand seeing its fifth consecutive monthly decline — a trend not seen since April 2012. Sound the alarm? I think not!

Interest rates are still at their historic low (though surely the MPC will introduce a small rise in the coming months) and long term price expectations remain positive – tag on to these the fact that more houses should be coming to market all makes for nice reading. Though the flip side is that rising house prices, stagnant wages and the increasing cost of living are all adding pressure to the ability of individuals and families to buy homes.

All this talk of property values did make me think how much house I would get for the equivalent price I paid in other regions. In some areas a hell of a lot more but some areas we’d be living in some tight square footage.

I live near Peak District, moving 5 miles closer reduces the number of bedrooms in my house by two and moving 5 miles away pretty much means a mansion for me. Thank god I like and can afford Penistone. A word of warning would be that you find a house price and location that work for you.

It is no secret that people pay more for the location as the below shows:

The added value is purely a location premium. If you take the Peak District, although many villages are idyllic they simply don’t cater well for residents – increased traffic from tourists, lack of investment in road infrastructure, tourists catered for more than residents and so forth. So just think is a beautiful view really the be all and end all as if it’s not you may save a pretty penny.

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

Enjoy the weekend,

Lee

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