UK Home Values Increase Three Times Faster Than Incomes
The average UK home has increased in value almost three times faster than its owner’s wages over the past decade, according to analysis published by the leading magazine
Mortgage Introducer recently.
The average UK home experienced a 43% rise in value between 2008 and 2018, compared to a 15% rise in salaries.
Homeowners in London boroughs and the Home Counties have seen the largest margins, with the average property price in Kensington and Chelsea rising by 85% in the past 10 years compared to a 3% wage increase.
Despite the increase in housing value there has been a decline in mortgage rates, with the average 2-year fixed rate at 75% LTV falling from 4.77% to 1.73% between 2008 and 2018.
Property first and foremost provides a roof over your head and a place to call home; however, over the long term it can act as a lucrative investment.
With falling mortgage rates making the cost of owning a home even more affordable, homeowners’ potential return on investment could be set to become even greater.
Many homeowners will undoubtedly take comfort in the fact that over the past 10 years, as they’ve worked hard to earn an income, their home has essentially been doing the same – and arguably even more successfully.
Though house price growth has slowed in recent years, it remains buoyant in many areas of the country, and has historically remained strong over the long-term.
This money needn’t remain locked away in our homes.
For homeowners looking to stay put, or move to a more manageable house, downsizing and remortgaging are both options that can enable individuals to release some of the money earnt by their home to help them with their wider financial goals.