My thoughts on the Nationwide House Price Index for May
The headline figures show annual house price growth slowing to 1.7%, down from 3.0% in April, with prices falling 0.6% month-on-month.
On the face of it, that sounds concerning. However, one month does not make a market.
Blackpool Rental Values
May was the first monthly decline of the year and came during a period that included two Bank Holidays, half-term holidays and increased economic uncertainty. House prices remain higher than they were a year ago and, in my opinion, the housing market continues to demonstrate remarkable resilience.
What we are seeing on the ground at Tiger Sales & Lettings and WebbMove certainly doesn’t suggest a market in retreat. So far this year, 93% of properties brought to market through our businesses have achieved a sale agreed, with 57% of those already completed.
What we are undoubtedly seeing is a shift from a seller’s market towards a buyer’s market. Buyers have more choice, are becoming more selective and naturally have greater negotiating power. As a result, pricing strategy, presentation and sales progression are becoming increasingly important.
For investors, the picture is equally interesting. Whilst house price growth has softened, property should never be viewed purely through the lens of capital growth.
Across Blackpool and Preston, average rents have increased by approximately 6.6% over the last year, whilst average property values have increased by around 2.7%. Combined, that represents a tracked return of approximately 9.3%, before taking into account any leverage benefits from mortgage borrowing.
Property remains one of the few investments where you have direct control over the asset, can generate regular income and benefit from long-term capital appreciation.
My key takeaway from this month’s Nationwide Index is simple: the market is changing, but it remains active.
For sellers: Price realistically from day one, present your property well and work with a credible, qualified agent.
For buyers: Have your finances agreed and solicitors ready to move quickly when the right property becomes available.
For investors: Despite legislative changes and softer house price growth, the fundamentals of supply, demand and rental growth continue to support the case for residential property investment.
As the old saying goes, “you can’t go wrong with bricks and mortar.”
