Fewer people than expected were forced into selling their homes, according to Martin Gahbauer, chief economist with Nationwide. Figures released yesterday, 1st December, show UK residential property prices have risen for the seventh month in a row; although the rate of increase appears to be falling off with November’s increase remaining at the 0.5% seen for October. The average UK property price now stands at £162,674, representing a year on year growth of 2.7%.
It is thought that better than expected unemployment rates are helping the market – although unemployment rates have risen considerably, the fact that many employers have opted to reduce working hours and pay rather than make employees redundant has meant that the unemployment figures are not as high as had been expected.
These figures were published the day after the Bank of England reported that there were 57,345 approved property purchase loans in October – the 11th consecutive monthly increase. However, there are signs that the positive trend is slowing down and economists are still predicting a return of falling house prices for 2010.
Every coin has two sides, however, and it was interesting to read that, according to a Barclays survey, twice as many people plan to increase their investment in residential and commercial property as intend to reduce. The survey reveals that real estate investment among wealthy individuals is set to rise from its current 28% to 30% of the average portfolio for the next few years. One of the more surprising findings was that emotional attachment to bricks and mortar often means that rich investors less rigorous in measuring the return on their investment and can, in fact, be unwilling to sell real estate at short notice. This despite the fact that properties used as the owner’s principle residence were excluded from the figures.
Of British and Indian investors, almost 30% have more than 50% of their wealth tied up in property and, of those respondents with more than £30 million, 40% had over half their wealth in bricks and mortar.
Well, if it’s good enough for them… read more about opportunities in the housing market