Information from House Price Indexes
Can the information obtained from house price indexes be perceived as accurate in any way? The latest house price index is from Nationwide and was released towards the later part of 2007. Some of the findings have shown that the capital growth achieved on property is lower than people have been used to in the last couple of years. Rent has been steadily rising though and the prediction is that many investors will be making a positive return on their investments. Even in the first year the anticipation is many investors could be making good returns on rental income and capital growth.
Generally speaking when an investor buys a property it is expected that they will lose around one percent of the property price due to rental shortfall in the first year. This is measured against the higher costs that are faced early on such as mortgage, management fees and other costs. However to offset this it is anticipated that property prices will rise by around five percent over the next year. With the increase in the number of property and people living in the UK within the next 8 years an extra 4.4 million people are expected to be living in the UK. This is all good news for the home owner and investor, the expectation is that the amount of houses required will not be built fast enough, in turn this then leads to a shortfall in housing and when this happens the prices of property increase due to the demand.
Information of this nature can be gathered together from the house price indexes, they are used to statistically predict what will happen and look at historical patterns as to what has happened in the past. From the information gathered from the house price indexes it has clearly shown the buyer demand has decreased the number of properties on the market and the price of property has stayed fairly stable. It is widely predicted that the winter months will remain quiet but as the weather starts to improve and in to spring the market will bounce back and continued rises should be seen in most sectors. Many estate agents have seen a fall in the number of instructions over the last few months but this would come as no surprise to any property professional that experience seasonal differences in the later period of the year, usually from around end of October. The interest rate issues and the introduction of the controversial home information packs have brought the dip forward in 2007 but the housing indexes and property professionals anticipate the new year to bring the buyers back into the market..