So, you're taking your first steps into the world of home buying, exploring online listings to find that perfect first home, and maybe even chatting with Estate Agents to arrange viewings. One of the biggest question marks hanging over you is about the housing market itself. Is it on the rise? Or is it going down? You've been catching glimpses of the average house price in the UK through news articles, but how it is behaving seem worlds apart from what's actually unfolding in the area you're eyeing! It's all quite baffling, isn't it? Let's clear the fog and shed some light on the housing market, but in a way that makes sense for you.
Those national average numbers you see? Well, they might as well be speaking a different language when you're hunting for your very first home. These averages, whether for the whole UK or broken down by regions, paint a broad stroke picture of the entire country. But what they don't reveal is what's brewing in your local neighbourhood.
Across the vast landscape of the country, some places are flourishing. Think shiny new homes, fresh job opportunities, and plenty of public and private investment all working towards transforming communities. People are drawn to these vibrant areas, eager to be part of these revitalised communities.
And then you have the flip side. Places where things aren't as rosy. Places where the local shops have mostly disappeared, and you practically need a treasure map to find a bank or post office. Young adults have packed their bags, seeking better job prospects elsewhere. Sadly, these communities are often low down in the pecking order when investment funds are on offer.
Now, in those thriving locales, home prices tend to keep climbing or at the very worst, hold their own. The demand remains strong due to the buzz of regeneration. On the other hand, communities that are facing decline might experience sluggish demand, causing local prices to dip.
The national average takes all these diverse communities and blends their figures together, giving you... well... a national average. Like throwing a super sweet and sour apples into a basket and getting a balanced taste. And like this, the drop in property prices in one spot could easily offset the rise in another. And so, what's happening in your specific location is lost in the national scorecard. Those overall numbers?
They're mainly useful for government stats and macro economics.
The reality is, the UK housing market is a grand tapestry woven from thousands of tiny threads. Each little segment can be grouped and sliced in countless ways.
Think about it like this: You've got micro markets based on postcodes, because each area will have its own unique bothers (eg limited public transport or fewer good schools) and benefits (close to a park or independent shops). Or you can sort homes into small markets based on whether they're flats or houses. You can even drill down further, focusing only on the number of bedrooms. So you could have a micro market made up of only 3-bed semis in Solihull, as an example.
If you've got a bunch of similar properties in a single spot, then you have a micro market. And each of these will behave differently. Typical home size, ratio of flats to houses, job prospects, amenities, public transport amongst other factors will all play a part in the unique performance of each micro-market.
When I bought my first home, it was a cosy 1-bed flat in a corner of the Docklands that was getting a major makeover. New transportation links were built, and new blocks of flats were cropping up daily. I paid £166k for my little home, which might seem steep next to the national average of £124k at the time especially when it also related to the average home type being a 3-bed Semi. On the face of it, it could have looked like I got a raw deal. But that wasn’t the case when I looked at the micro-market. All the other properties around were flats too, and being close to work in bustling Greater London added a certain premium. The prices of homes in much cheaper locations was dragging the national average down, but it had no meaning in my little part of London. OK, so my flat also wasn’t the bargain of the century, because I paid the expected price for it in its location. I got an average deal in my micro-market, which I would argue is actually pretty good. I adored my little home, and its convenience was priceless. For me, there were intangible factors that made this flat and its location my dream home, and no national average could capture that value.
So, here's the takeaway: Set aside those national averages and dive into the specifics of your local micro property market. This is where the real treasure lies. This is how you'll compare potential homes and pick the one that truly resonates. Say goodbye to irrelevant data, like flats in Penzance when you're set on a house in Preston, or houses in Westminster when your heart is set on a Whitby flat.
And where can you find this detailed intel? Scope out property portals, peek at local land registry data, and build a rapport with your friendly local estate agents. They're the ones with the scoop on what's happening in your neck of the woods. Keep records of your local data to compare guide prices with sold prices. Look to see what is flying off the shelves and what is languishing in property purgatory. The more you become familiar with your little location, the better you will be in spotting a real bargain when it comes along.
In the meantime, happy hunting for your new home!
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