Property Price Losses in 2011
property price losses in 2011
To date, the average property owner has lost just under £1,900 on his property since Jan 2011.
This chart shows the impact of slow property prices coupled with sharply rising inflation. This analysis also assumes a 1% per year maintenance cost. Clearly, for apartments and large detached houses, this cost will often be higher and therefore the losses will be greater.
This analysis is based on an average property value of £162,000.
Therefore, for London based property, where the average price is around double the UK average value, then the losses per average London property will be closer to £3,800.
In my opinion property speculation is a bad idea. Property could continue to fall until 2015.
Buying to let can be a good idea if you’re buying to earn money from income (i.e. rent). But if it’s being done to earn from increasing house prices forget it. Buying something in the belief that it will be worth more in the future is gambling. Buying something to earn from the revenue the asset generates is investing.
Property is rising in London due to cash rich foreign investors taking advantage of the falling Pound. But London could turn out to be the biggest property bubble of them all, it’s got all the signs of one.
Yes, I agree – London property markets are driven by risk aversion, greater fear in other locations and a weak pound.
The pound is recovering and risk and fear will recede – then what for a weakened city of London? Slowly down is the only route, surely?