- UK House Prices Soar
29/10/2006 07:51 AM
Jennifer Hill
Property prices have soared at more than three times the rate of stock market returns in the past decade, figures showed.House prices have surged 187 percent since the market recovered in February 1996, while stock prices rose 61 percent over the same period, data from Halifax revealed.
The increase in earnings and rate of inflation were even more modest. Nominal earnings rose by 54 percent and retail prices increased 31 percent.
Property values have tripled in three regions: London house prices have soared by 240 percent, Northern Ireland by 231 percent and south-west England by 213 percent.
“The premium for living in London has increased over the last ten years, as the average property price in the capital has more than tripled,” said Tim Crawford, group economist at Halifax, Britain’s largest mortgage lender.
On an annual basis, UK property prices have increased by 10.6 percent, outstripping a 4.6 percent rise in equities, a 4.2 percent lift in earnings and a 2.6 percent increase in retail prices.
The average house price stood at 179,425 pounds in the third quarter of 2006, up from just 62,453 pounds in the first quarter of 1996.
Crawford said the south-west had emerged as a highly sought after destination, led by Cornwall. It ranked as the top-performing county since February 1996, with a 274 percent rise in house prices, equivalent to 13.3 percent per year.
In Northern Ireland, Newry and Antrim led the property price boom, making it into the top five towns.
The smallest increase in house prices in the past decade has been in Scotland. Property vales have risen 110 percent north of the Border, or 7.3 percent per annum.
However, Scotland experienced a rise in house prices during the downturn of the early 1990s.
Between the second quarter of 1989 and the first quarter of 1996, Scottish house price rose by 25 percent, compared to an 11 percent tumble across the UK.
The early 1990s housing market downturn was triggered by steep increases in both interest rates and unemployment – neither of which is in prospect for the UK economy, it said.
Halifax said sound fundamentals underpinned the housing market, although price increases seen in the past decade were unlikely to be repeated because of affordability constraints.
The figures are sourced from the Halifax house price index, which dates back to January 1983.
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©2006 Xtra LimitedAre there many people here who invest in the UK? I found some amazing properties while living there – for 20,000 pounds you could buy a place that was returning about 80 pounds a week in north England. Not only that but the tenant pays the land tax and water rates.
Phil
“A life lived in fear is a life half lived”
hi phil – are you still investing there right now.?
HI guys,
Great statistics, I’m looking into investing in the UK at the moment there looks to be some great capital gains potential.
The tenants in the UK (of which I am currently one!) do pay council tax on the property as well as the water rates too. council tax is like the land rates you get in NZ/Aus. The only things that can’t be passed onto the tenants is mortgage payments (but they do pay rent!) body corp/strata fees, and general maintenence of the property.
Dohicky
Having been born and bred there and still with a few UK properties i can certainly confirm that Capital Growth and Yields have been very strong in certain parts of the Country.
In saying that there are parts of the North of England i would not touch like certain streets in Oldham where you can buy a house for 26000 GDP and yet will never get a tenant and where it makes the gettoes of the USA look like mansions.
If you stick to the established towns then you cant go too far wrong with the right DD. Borrowing as Australia citizen is difficult and similar to Overseas Residents purchasing over here 80% max lend with most lenders.
Council Tax is the countries equivalent of our Council Rates and is charged on a sliding scale with a variety of considerations. Unlike land tax which is based purely on the unimproved value of the land.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Hi all,
I have invested in the UK over the last year or so, and it is a very attractive place to invest. But you must do your homework and spend some time over there, or havea trustworthy contact with local knowledge. As far as a 26k property goes, it will be tenanted by somebody on DSS, and you WILL NOT get finance for it, for decent yields and potential CG look at , Yorkshire, Durham, Lancashire and West Scotland( see my post called “Europe”), Southern England is at the end of a 5 year boom so i would wait couple of years. As i Said, Do your homework as there are many things that can trip you up!!!!!! feel free to PM me if you would like any more info
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