Investors in residential property received positive news this week, as Nationwide announced that the UK average house price reached an all-time high. What could this mean for property investment funds going forward?
Simon Morris: Residential Property Expert
London-based Simon Morris, is an industry expert who uses his knowledge to act in an advisory capacity to property investment funds. Simon analyses the trends running through the UK property market to generate the highest possible returns for their UK-based property investment portfolio.
Simon has observed the trajectory of the residential sector, as the housing market has picked up in the wake of recovery, and recognises that house prices are a key indicator to assessing the profitability of residential markets to your portfolio. This is why the Nationwide announcement is such positive news.
Average House Price Surpasses Pre–Crisis Peak
The Guardian has reported that Nationwide have suggested that average house prices have finally surpassed their pre-financial crisis peak on the back of 13 months of consecutive growth. It now stands at £186, 512.
Nationwide also measured a monthly inflation rate of 0.7% on its index, which it calculates based on mortgages approved by the lender that month. This is notably lower than the 1.3% recorded in April, leading many to believe that a stabilisation is currently taking place in the UK housing market.
This is due to several factors, as highlighted by Robert Gardner, Nationwide’s Chief Economist. The Guardian reported that Gardner said: “The underlying pace of activity should become more evident as we move through the summer months and the impact of MMR [mortgage market review] becomes clearer. However, with mortgage rates close to all-time lows and labour market conditions continuing to improve, underlying demand for homes is likely to remain strong.”
Simon Morris on the Strength of the UK Residential Sector
Simon Morris suggests that the conclusion property investment funds can reach from the latest Nationwide data is clear. The residential sector is strengthening as an investment area with each passing month, meaning that it is sure to generate high returns for your portfolio going forward.