Any property bulls who expect a strong bounce back in residential property prices will be sadly disappointed by the latest figures from the Nationwide.
They reveal that prices have actually dropped 1% over the last year leaving the average home costing £163,327.
As we know there is no such thing as an average home. If you are lucky enough to own prime London property that 1% drop is probably a 25% rise depending on what part of London and the type of property you have invested in. If you have invested in property in say the North East in somewhere like Hartlepool you are probably nursing a double digit fall.
Property is a great barometer of what is happening in the real economy. One truism is that even in the worst of times somebody is doing well. If the headlines are true, doctors are no longer on a one way ticket to a 'moral' fortune because of the NHS cut backs. Other sectors are even now picking up their mantle and boosting house prices in the most desirable residential areas. With the price of some metals hitting an all time high perhaps it's scrap dealers that once again are coining it in. All this is an argument for investing in the best area you can afford, even if gross rental yields are less.
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