Friday, 23 May 2014

Ilkeston and Belper property prices .. the long climb back to 2007 prices

Some landlords have been speaking to me recently about stories in the press and their concerns about booming house prices and the next housing bubble in  Ilkeston or Belper. In the past few years, if you were going to be buying in Ilkeston or Belper, it was vital to ensure that you built in some capital growth by buying cheaply or finding a way to add value.  In the last six months, properties in both towns have risen by between 2% and 3%, some even have been going for their ‘full’ asking prices, so are properties too expensive. 
Over the last few months, the value of those 2 bed starter homes  in Shipley Common area of Ilkeston (I choose them because everyone knows them) have nearly returned back to the same level they were selling in at the 2007 peak of around £80,000. So are we nearly back to the boom prices / values of 2007 then?
Yes and No. Yes, the headline price for the property sells for is the same figure (ie £80k in 2007 and £80k in 2014), yet No, because these headline figures don't take into account inflation. Since 2007, inflation has risen by around 19%. If  ‘2007 property prices’ had kept up with inflation, that same 2 bed house wouldn’t be £80,000 today but £80,000 plus 19% inflation which equals £95,200. Most people think inflation is a bad thing, eating away at the real value of your savings. It can however, be advantageous to property investors. 
My answer to landlords is get the best advice and opinion you can. Speak to me, speak to others, do your homework and drive a hard bargain when buying, thus ensuring when prices do start to rise again, you are in pole position.
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