New figures from Halifax suggest that UK house prices fell 0.3% in February. Simon Morris explores what this could mean for UK property investment funds looking to capitalise on the opportunities presented by the UK residential property market.
The UK residential market can prove lucrative
Simon Morris is a London-located property specialist. In this capacity Simon advises UK property investment funds on how to take advantage of opportunities presented by the UK property market to reap significant returns.
Simon’s experience has shown him that the residential element of the UK property market can prove lucrative, depending on how you capitalise on it. Investors can use average house prices as an indicator to determine how they should enter the residential property sector. New figures from Halifax, coupled with earlier figures from Nationwide suggest that house prices fell in February.
Halifax reports fall in UK house prices
According to the BBC, Halifax reported recently that the average UK house price decreased to £192,372 in February. This follows a rise in January of 1.9%. Furthermore it supports the overall idea that house prices fell in February. Last week Nationwide reported that average prices slipped 0.1% from £188,446 in January to £187,964 in February.
Yet quarterly figures tell a somewhat different story. Halifax noted that quarterly figures are more reliable as they smooth out monthly volatility. According to the bank, house prices in the three months to February were 8.3% higher than the corresponding three months the year before. This sits only 0.2% lower than the annual rise of 8.5%.
“Activity picking up modestly as 2015 progresses.”
Chief UK and European economist at IHS Global Insight, Howard Archer, commented on these figures and what they could mean for the UK housing market. Archer argued that February’s small decrease looked like a minor adjustment after the steep increase that came the month before.
Archer went on to say: “We suspect that housing market activity is now gradually turning around after losing appreciable momentum from the early-2014 peak levels, and we see activity picking up modestly as 2015 progresses.”
What does this mean for investment opportunity in the residential market?
As such these figures suggest that there is still opportunity to be found in the residential property market for UK property investment funds. Average house prices may have fallen in February but more reliable quarterly figures suggest they’re rising and the market looks set to stabilise in 2015.
Yet as Simon pointed out recently when he looked at the property market in 2015, there are a number of challenges investors are likely to face as the year progresses. That’s why you need to ensure you research any opportunity thoroughly before you invest.