Varying Property Prices Across the UK
The housing market is an incredibly important indicator of the health of the overall economy. A huge amount of money is invested in the industry every year, with the potential for large profits attracting business people and entrepreneurs from every corner of the globe. As well as being a prime investment opportunity for foreign interests, the UK’s property market also generates a large amount of income for individuals and businesses across the country. Significant increases in house prices have provided homeowners with a big boost in capital, while landlords and property professionals have also been able to cash in on the boom.
Though prices have gone up in almost every city, town and village across the UK, increases have been far from consistent with some areas seeing unprecedented increases and other only experiencing minor price hikes. Though the exact reasons behind these variations aren’t always clear, what we can see is that prosperous and dynamic areas have been more likely to experience significant price increases than those with slower economic growth.
As a result of the UK’s uneven housing market, the appearance and development of franchised estate agents hasn’t been uniform throughout the country. Entrepreneurs have had to carefully research local markets to ensure they select the right locations for their branches, while keep a close eye on future trends to ensure they’re well position to take advantage of any emerging property hotspots.
The UK property boom
Thanks to inflation and increasing demand, house prices in the UK have generally increased year on year. In the last 25 years, prices have only crashed twice, once between 1990 and 1992 and then again in the financial crisis of 2007-2010. Between 1992 and 2007, prices rose much faster than inflation, generating significant wealth for property owners and tempting eagle-eyed entrepreneurs to invest in property and property-related businesses.
Though prices did dip between 2007 and 2010 – and in some areas continued to fall in 2011 – overall, prices have still increased significantly. In the twenty years between 1996 and 2016, the average cost of a UK home rose 281%, with London property up by a staggering 501%. Though individual homeowners will have benefitted hugely from these increases, it’s buy-to-let landlords who have really seen their investments soar with most now earning around £15,000 for every £1,000 they invested 20 years ago.
As house prices have risen so dramatically, many homes are now out of the reach of first time buyers and those on low incomes. This has lead many experts in the industry to predict an end to the boom and a slow down in prices. However, with prices up 6.4% on last year and demand continuing to outstrip supply, this slow down doesn’t seem to be on the horizon any time soon.
The property boom and franchised estate agents
As any franchised estate will tell you, the main factor that drives house price increases is demand. There simply aren’t enough new homes being built in desirable areas, so the properties that are available are sold for a premium. This means that there is a lot of money to be made from property throughout the country.
In London, the area that’s seen the biggest increase in house prices, growth has been heavily influenced by foreign investors looking to cash in on the capital’s quickly rising property prices. Franchisees have also been quick to take advantage of the housing boom, with a new estate agent opening up in London every 1.6 days.
Across the UK, a record number of people are now working in the real estate sector, with 562,000 employed as estate agents or in related fields. This is largely down to increased demand and the large potential for profits the industry offers. As franchised estate agents are able to expand more quickly to take advantage of emerging trends, many of these new branches are run by franchisees.
How much do prices vary across the country?
House prices vary hugely throughout the UK. In March 2015, the average cost of a property in London was £498,000, while in Northern Ireland you could snap up a home for an average of just £145,000.
Though house prices are going up in most parts of the country, the rate of increase varies widely with the London market sky rocketing as other area virtually stagnate. Though prices have always varied in different parts of the UK, this rapid increase in the cost of properties in the South East has lead to more dramatic variations in house prices than ever before.
In general, London and the South East have seen the biggest increases in property prices with a 10.6% average increase. In the North East however, prices rose just 0.8% last year, bringing the average cost of a house to around £100,000.
The future of property prices in the UK
As the London property market is so far ahead of other parts of the UK, the experts are predicting that the capital’s boom will begin to slow in the next few years as first time buyers start to look further afield. Potential property hotspots include Margate, Brighton, Woking and Southampton, while Rotherham, Manchester, Birmingham and Mid-Glamorgan are also attracting investors.
With franchised estate agents watching closely to see where the new hotspots will be, it’s likely that branches will be popping up in these property hubs in the very near future. The more estate agents open up in these regional areas, the more it drives interest in property investment and the faster prices are likely to rise in the short term.
As franchised estate agents often work with existing companies and local entrepreneurs looking to get involved in the property industry, they are well placed to take advantage of insider information and select the right properties for the fast-paced market.
Though prices vary across the UK, what’s for certain is that property is only going up. Though values may temporarily stagnate, in the long run, property is still a safe, and lucrative, investment.