Rising Prices Making Homeowners Millionaires, A First Time Buyer's Guide to Making an Offer, Plus More

Welcome to the October edition of the Town & Country newsletter.

This month, UK property prices are set to rise by 56% over the next decade, more than four million homeowners over the age of 55 are looking to downsize, homeowners across the country are sitting on a small fortune thanks to rising house prices, and we share a guide to making an offer as a first time buyer.

UK Property Prices to Rise by 56% Over the Next Decade

The latest figures from the property market are indicating that property prices will continue to surge ahead over the next decade.

Amidst a great deal of concern regarding house prices and Brexit, the news that house prices will continue to grow at a steady rate is sure to be well-received by homeowners.

The statistics suggests that the value of UK property will continue to climb at a rate of 0.37% a month, which will mean by 2027 the average UK house, will be worth &347,757 – an increase of 56% over the next decade.

Surprisingly, Nottingham has come out on top as the city that is expected to see the most growth, with the average property price expected to have risen by 160% over the next decade. Glasgow and Oxford came second and third with predictions showing that the average property value will go up by 131% and 115%.

Cardiff and Edinburgh are also expected to be swept up in the post-Brexit boom whilst areas that have enjoyed constant growth over the last few years like London and Southampton don’t even make the list.

Bristol, Leeds and Swansea are predicted to see the smallest amount of growth, although they will still see a considerable 58%, 67% and 80% rise in value over the next decade.

Four Million Homeowners Over-55 are Looking to Downsize

New research from life insurance company, Prudential, indicates that almost half (47%) of UK homeowners aged 55 and higher are planning to downsize.

In total, more than 3.9 million Brits will be on the move during their later years, and on average, will be walking away with around &112,000 in equity.

One in ten (11%) expect to make more than &200,000, and a staggeringly high one in seven (13%) state that without downsizing, they could not afford to retire.

When asked what they planned to do with the equity raised from downsizing, 60% of respondents answered that they would use it to increase their retirement funds, 47% were planning to use the cash for travelling, whilst 13% wanted to help their children by a house.

For the majority of respondents, however, the main driving force for this lifestyle change is not for financial purposes.

From Prudential’s study, it seems that only 28% of downsizers are moving to secure more money for their retirement. Whilst nearly three-quarters (74%) answered that convenience was more important to them, with one in three (34%) stating that having a smaller, more manageable garden was a major motivation.

Across the UK, Northern Ireland appears to be the region with the highest number of over-55s who are looking to downsize (63%), closely followed by the East of England (60%).

Whilst Prudential found that those least likely to downsize live in London (41%), Scotland (45%), and the West Midlands (45%).

In response to the unexpected preference for convenience over profit, Prudential retirement income specialist, Vince Smith-Hughes, had this to say, “it’s interesting to see that these figures challenge the common theory that ‘my house is my pension’.”

According to Vince, selling your property to free up cash may be appropriate in some cases, but it should never be seen as a substitute for saving for retirement.

If you would like any advice regarding your downsizing options, please don’t hesitate to get in touch.

Homeowners are Becoming Millionaires Thanks to Rising House Prices

Barclays Wealth’s recently published a prosperity map that sheds light on the rising number of millionaires in the UK.

They found that as a result of rising prosperity and property prices, one in 79 Brits over the age of 21 are considered millionaires.

This figure has risen considerably since 2016 where the statistic was one in 84 Brits. In fact, according to Barclays Wealth, the UK’s millionaire population is growing each year by approx. 7.6%.

Whilst this group of wealthy individuals is still significantly smaller than the size of the wider UK population, at a number of 625,000 and rising, we have reached our highest number of millionaires on record.

When this prosperity is analysed region-to-region (see below table), there are some very clear and obvious findings.

Most notably, that our millionaire population is highest at the heart of the UK. In our capital, a staggering 165,000 people fall within this millionaire-bracket. And with an average house price of &502,787, are we really that surprised?

After all, there appears to be an undeniable correlation between highest property prices and highest levels of prosperity.

In the northeast of England, where the average house price is &118,971, there are only 12,000 millionaires. That is just 7% of the number of wealthy Brits found in London, and a difference of over &380,000 in terms of the average house price.

When it comes to highest growth, the East Midlands and South West experienced the greatest surge in wealthy individuals, up 11.1% and 10.5%, respectively.

From Barclays Wealth’s prosperity map, it is clear that property is a great investment, and has sparked growth in many UK cities.

Talk to our team today to find out what we can do for you.

A First Time Buyer's Guide to Making an Offer

If you’re a first-time buyer and you’ve begun the hunt for your first home, you may think that once you’ve found the right home you simply offer what they ask for and it’s job done.

However, when it comes to making an offer on a home, there’s a bit more work that should go into it than just offering the price advertised.

The property market is possibly more competitive than it’s ever been. You want to be confident when making an offer that you’re not going to be stung by an inflated asking price or take yourself out of the running by offering too low. To help you prepare, we’ve put together the following information to help you through this stage of the home buying process.

The first step and arguably most important step you need to take is speaking to an expert. If you’re a first-time buyer then you probably don’t have a wealth of knowledge on how the market works and what you can and can’t afford. Get in touch with a mortgage advisor, get informed on how it all works and more importantly, find out what your price range is so when you do make a formal offer you can do so with confidence.

Once you know how much you’ll be able to spend, it’s time to get a better understanding of your local market. The more research the better. Take a look at what’s up for sale currently and find out what your budget will fetch you in each area.

Build a list of key features that your home will need such as the number of bedrooms or a driveway. The chances of you moving into your dream property with your first move are somewhat slim, however, it’s important that you know what you’re looking for and how much it will cost you in each area.

It would be wise at this point to get in touch with a local estate agent. You can do as much research as possible, but a good local agent will always be a benefit as they will know the market like the back of their hand. This means that they can fill you in on what to expect from vendors and hopefully help you avoid any pitfalls of the market.

Now that you’ve done your research on what you want, what you can afford and what the market has to offer, it’s time to book some viewings and get out there. Things can move very quickly in the property market, so your previous work and research leading up to this point will come in handy as there’ll be no time wasted travelling to unsuitable areas or over-priced properties.

While viewing properties be sure to check out the building's structure and not just its décor. Check for any damage such as cracks in walls or damp. Make sure you understand exactly what you’re getting into and have a good idea of the current state of the home as it can help form your offer.

If you’ve managed to find the right home, then it would be best to act quickly as there’s a good chance you’re not the only one eyeing up that house. If you’re ready to make an offer, consider a few things before doing so. How much do other similar properties go for in the area? Does the property need some repairs? Have house prices dropped slightly since the home was first put on the market? We’d all love to knock a few thousand off the asking price, but the seller isn’t going to do it just to be nice, so if your offer is lower than the asking price, you’ll need to demonstrate why.

Now before you finally put your offer on the table, try and organise all the other pieces of the puzzle beforehand so you are ready to go as soon as it’s accepted. If you’re a first-time buyer then one of your major benefits is that you don’t have to organise selling your own home, but if you can organise such things as surveys and solicitors then it’ll make the process much smoother.