In 1952 – ah, those were the days - the average cost of a house in the UK was around £2000. Now the average price has passed the £200,000 mark and it doesn’t look like slowing down any time soon. There are many factors involved in rising house prices and many who will argue for one reason having more weight than another. Here are 3 things to think about:
Generally speaking house price rises are caused by inflation, a term we often hear attached to goods and services. It is the increase in price of goods and services in a particular economy over time – and it applies to a 2 bedroom property in Edinburgh just as much as a pint of milk. If you thought £2000 sounded cheap for a property in 1952, just imagine how cheap a pint of milk was.
Supply and Demand
One of the most glaring reasons for house price increases is the fact that aren’t enough properties on the market. When demand is strong and there is a reduced supply there is really only one way that prices can go – up up up. In Edinburgh there has been a shortage of good quality properties on the market for some time – which makes the current climate a great time to sell with a high chance of exceeding your asking price.
Improvements in your Area
If you live an area that is gradually improving over time – in terms of amenities, transport links, good schools etc – the chances are your property has been rising in value too. Sometime areas can go through a sudden regeneration too – think of the Edinburgh trams. Taking advantage of these types of price rises means thinking like a property investor. If you can’t afford a place in the area that you want – look for the potential in a less expensive area. Who knows? Ten years down the line you might find yourself sitting on a goldmine.
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