In the April 2012 Issue of Property Investor News
Property Values in 15 Years
Until 2007 the UK property market was pretty predictable, property prices doubled every 10 years; home ownership was on the rise; the Private Rented Sector grew at the expense of social housing; beautiful character homes sold quickly at premium prices, while new build property 'boxes' were built on big estates and a two-bed new build sold for the price of an older three-bed. Whatever was built, it was never enough to satisfy demand. Residential property was such a guaranteed investment that until 2002/3 you could pretty much have bought any property in any street and you would have made a relative 'killing', whether it was from double digit annual capital growth or from great rental income returns.
But in 2007 the market changed. According to Professor Michael Ball who produces the RICS European Housing Review, capital growth collapsed in the last five years with an average fall in real terms of 30%. Unusually rents have suffered too. In October 2008 an oversupply of accidental landlord properties flooded the market, dropping some rents by up to 20%. Since then, according to the Belvoir Lettings Index, only three out of eleven UK regions have actually recovered back to 2008 levels, indicating that even rental returns haven't kept pace with inflation.
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