We are just starting to receive the first reports on property prices for 2015 and, depending on which ones you look at, we haven’t had too bad a start this year – perhaps even slightly better than expected.
As a reminder, have a read of our property price forecasts for 2015, which were suggesting around 2-5% property price growth on average 2015 versus 2014.
Halifax Index for January 2015: Average Price £193,130
Annual change +8.5%
Quarterly change +1.9%
Monthly change +2.0%
Nationwide Index for January 2015: £188,446
Annual house price growth +6.8%
Monthly change +0.3%
LSL/Acadata index for January 2015: £277,857
Annual house price growth +7.5%
Monthly change +0.3%
Rightmove index for January 2015: £273,275*
Annual house price growth +7.5%
Monthly change +0.3%
Remember though the Rightmove Index is a measure of the price people market their property for – it is typically 25-40% HIGHER than actual property prices achieved measured by the Land Registry.
So overall, the growth in property prices year on year so far seems to be somewhat higher than the forecasters have predicted so far, achieving a 7-8% increase year on year versus the 2-5% predicted.
But don’t be fooled by the data!
January is a month where property transactions are traditionally low and the less properties sold, the less robust the data results are, so I wouldn’t read too much into these figures at all – apart from the fact they suggest prices are still moving forward ‘on average’ albeit the regional and town performances are hugely diverse.
Read my UK Regional Property Price Update
Find out what's happening to property prices in your town
First time buyers have the best mortgage affordability levels in 15 years!
What is interesting from the data too, is despite many newspaper headlines scaring First Time Buyers into thinking they can never afford to buy – this chart from Nationwide shows affordability of the mortgage today is as good as it was 15 years ago! Of course, prices are higher, so the deposit is tougher to get – hence why the Bank of Mum and Dad has thrived. Parent’s property prices have done well in the last 15 years, so they can afford to give money from their own home to the kids to afford their deposit.
Checkout the Nationwide House Price Index
Take a look at our First Time Buyer Checklists
What do these indices tell investors?
At the moment, 2015 may well be a good year to try and find a bargain, but you will have to look very hard. Reports from agents suggest there is much more stock on the market, with more people putting their properties up for sale and an increase in the number of buyers around too.
It’s probably too early to ‘bag a bargain’ as there are also very low repossession rates – the lowest for nearly 10 years - and fewer people are suffering mortgage arrears.
But, half way through the year when we know who (or which..) political parties are in power, most buyers will have committed themselves for the year and sellers who overpriced will then be desperate to sell, it’s likely you’ll be able to find a few properties for sale which are worth having!
For more on analysing a property’s potential buy to let returns, read our Buy to Let checklist and Financing a Buy to Let Property.
