Alastair Woodgate, Director of St Albans and Watford based Chartered Surveyors, Rumball Sedgwick, responds to one of the latest property price forecasts:
An article in the national press last week caused me to take a sharp intake of breath: in this article, one of the major high street banks set out its prediction for the property market, nationally, over the next five years. Its calculations were based on rental trends, employment levels and commuter behaviour as well as house prices. The results showed significant variations across the country, with increases of just under 3% in Wales to around 12% in London, (contradicting many forecasts of a property price fall in the capital), concluding that prices are expected to rise nationally by 6.1% between now and 2021, with confidence among property investors remaining strong. But the Bank also highlighted its predicted ‘property hotspots’ with St Albans’ house prices expected to rise by 38.8%, outperforming the rest of the UK with the exception of Richmond Upon Thames at 39.1%.
So, should we be seizing the opportunity now to trade up or, should those who can afford to, be rushing to buy a second property? Well, this is only one forecast and, as the article itself made clear, no guarantee of how prices will actually perform. Historically, property has proved a good investment over a long period, but there have also been downturns, and many other recent studies have predicted that house prices will remain stagnant at best, or even fall, in the face of economic and political uncertainty.
Rather than making decisions based on predictions let’s not lose sight of what else a property purchase means to us. Our home is a place of security, a refuge from the hustle and bustle of daily life, a place to express our own personality, and there is a pride in home ownership, which also bonds us to our community. A move can be for schooling or employment reasons too. So whether your move is this year, next year or in 5 years’ time, making a property purchase based on these factors as well means that whatever the vagaries of house prices our home will still be of value to us.