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Taken from an 'Interesting discussion on Citywire' DL recently posted, this was reply #15 gives overview of Nationwide Building Society UK house prices adjusted for Inflation 1975 - 2018.
Thought worth an independent post for those that may read the main thread.
The general perception is that house prices have risen consistently for a long time.However, have a look at the Nationwide inflation-adjusted index since 1975 here:
(note that it's an excel file, not a web page). They choose to fit a trend with a constant growth rate of 2.6%, but what I see is a bit different.I'd suggest that from 1975 to about 1998 the real price was more or less flat at around £100k, aside from a big boom and bust centered on 1989.There was then a much bigger boom up to 2006 followed by a partial bust which left prices around £200k, where they've remained since, so in real terms basically all the gains came in less than a decade in the late 90s and early 2000s.To a large extent that was driven by falling interest rates, but rates are now rising ...
I am no expert
but my view is property inflation is driven by a number of things
i belive the next 30 years will be a very different set of figs from the past 30 years
most areas in the uk have not recovered since 2007 crash
the SE bubble had large imagratipn and a lot of overseas cash comming in
I think the EU question is a major one and it can’t be answered easily
but I know one thing I don’t think we will see a doubleing in price for a very very long time
I was at a landlord event on Friday and most landlords think like me the BTL party is over if your leverageing
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Hi, maybe I'm missing the point slightly, but isn't it only an issue if your leveraged with little cash flow and a hope of capital gain?
I am leveraged with 70% mortgages, but aim for approx 300pcm positive cash flow per property, so basically I have tax to pay on the gain now, understand that with tax changes my bill will go up a bit but my mortgage interest cost is on average 170 pcm of which I can offset 20% directly off the tax bill, so yes it's an increase but isn't going to wipe out my profit.
Or am I calculating this completely wrongly?
Ps.vi am already a 40% tax payer so changes aren't going to affect my MTR
Slowly working towards financial freedom
I agree, I don't think we'll see the price increases from late 80's early 00's again anytime soon.
It would be interesting to superimpose real UK wages from 1975 on the Nationwide real HPs.
But that would need a reliable inflation index...