How Much Have UK Property Prices Really Risen By?
If you are hoping to get onto the UK property ladder then the recent price increases will have left you feeling pretty deflated. On the other hand, if you already own a property then this is great news for your investment.
At this point it is worth considering whether house prices across the country have really risen by as much as you might think. You might have read a few stories about massive price increases but does that reflect the truth of the matter?
Prices Vary By Region
One of the interesting things about property prices in the UK is that they vary so much from one region to another. Of course, London is traditionally the most expensive city in the country and it has also seen the strongest increases in recent months. Incredibly, recent reports confirm that a square metre of property in Kensington and Chelsea now costs close to £11,000. At the opposite end of the scale, the cheapest place to buy is Stanley in County Durham. Here, it will cost you just £818 per square metre. These are the most extreme examples and they give a good idea of just how much prices differ by across the country.
Increases Vary Too
While prices in London are booming, in other parts of the country they aren’t moving very much at all. As an example, the year on year increase reported for London in May 2014 was a whopping 18.5%. However, in the North East of England the rise was a far more modest 0.9% and in the North West it was only 1.3%. As a whole, price increases for England and Wales for this period were reported as being 6.7%. What this shows is that the difference in price between London and the rest of the country in growing even bigger all the time. We have even seen properties which are classed as undesirable being sold off for just a pound recently in Liverpool. There’s no chance of that happening in London anytime soon, as the average house price in the capital has now reached over £360,000.
The Real Rate of the Increases
It is interesting to look at massive figures and different percentages when it comes to house prices. However, it is easy to lose track of the real rate of the increases and what this means. A brilliant way of picturing these increases more clearly comes from the TotallyMoney site. They have a very clever infographic that compares the UK’s house price rises to common grocery items. For example, it compares current food prices to those back in 1973. According to the infographic, food prices rose by about 527% on average between the years of 1973 and 2014. However, the nation’s property prices have shot up by a staggering 1724% in the time. If we take a look at the price of bananas as an example, the price of a kilo of these potassium-rich treats was just 24p in 1973. These days you can pick up a kilo of bananas for a very reasonable 86p. However, if they had increased at the same rate as the UK’s properties then you would need to shell out £4.38 for the same amount of bananas.
What Do You Think?
It is said that property prices are as high or as low as people are willing to pay for them. Clearly this is true to some extent. It is obvious that there are far more people willing to pay a lot of money for a home in Chelsea than wanting to buy those pound properties in Liverpool. However, do you think that something should be done to stop prices spiralling even further up? If so, what do you think can be do about this?