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Abby Tomlinson

Bonus - Back To The Future: How To Predict Future Property Prices

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Rob & Rob

 

The likes of Savills/JLL are predicting circa 20-30% gains in Northwest/Manchester over 2018-2022 whereas the property cycle and the historical data you’ve presented suggests prices could rise up to 150% in the second half of this cycle (2020-2026 or so). Is there a discrepancy? Are they being ultra conservative or are they ignoring historical data?

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I also just read this article https://www.thetimes.co.uk/article/house-prices-fix-your-eye-on-the-northwest-0r6xqcx9x

 

"House prices in Edinburgh, Birmingham and Manchester are set for a rise of between 20 and 30 per cent over the next four years, according to Hometrack, the data analyst. Since 2009 London has soared ahead of other cities, with an 86 per cent increase in house prices, but growth in the capital is stalling. The average city UK house price grew by 4 per cent last year, and in London by 1.6 per cent. However, in Edinburgh house prices rose by 7.7 per cent. In Birmingham they grew by 7.3 per cent and in Manchester by 6.7 per cent. Cities near London also started to see slowing house price growth"

 

This reflects the trend in the last cycle where you noted price growth in London in the first half of the cycle around 90-100% and very little movement in the North West; whereas in the second half London grew at a similarly high rate but the Northwest exploded at 150%. Since London has grown at 86% in the first half of the current cycle, it looks to be very very similar this time around with the second half of the cycle poised to see explosive growth in regions like the Northwest.

 

Again, this article quotes Hometrack saying the North West (well, Manchester) and the Midlands (Birmingham) will likely grow at 20-30%.

 

Why do you think this is? Conservative reporting because they can't possibly put predictions of 150% in writing for fear of what might happen (backlash, frenzied investing) or ignoring historical trends (or assuming "it will be different this time")?

 

Akhil Patel and others (maybe you've said it somewhere too) suggest this cycle is being turbocharged by foreign investment at unprecedented levels too - particularly in Manchetser/the North West. As an investor in regional locations (2 properties in Bolton/North West and 1 in Kidderminster/Midlands), I feel optimistic that the likes of Savills/JLL/Hometrack etc, although positive, are under estimating! What do you think?

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I posted this in another topic "Fred said there would be a crash in 2019, does he mean a wobble"

 

I found something interesting doing a quick bit of research on a property of mine. It sold in 2002 for about £25k then in 2006 for £84k, slap bang in the middle of the last boom. A couple of others on the street sold for similar values at similar times. Apart from feeling sorry for the person who bought it in 2006 as I just bought it in 2017 for £85k (at least he didn't lose anything, apart from the fact he bought it at the worst time and sold it at - hopefully - the best time), it's really interesting. I can't help but gently cross my fingers for it to more than triple in value again from 2020-2024....!!!

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Rates up to 0.75% today, so will be interesting to see how that will impact mortgage approvals and property prices in the coming months in both London and the other major cities. 

 

I have alerts set up on Rightmove for my local area in SE London and have noticed a lot more "reduced" emails in the last couple of months. Reduced prices and longer time on market.

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