A term I hear which gets banded around a lot in the property investment world is that property doubles in value every 10 years. Quite a contentious topic of conversation around the dinner table especially when one investor points out that they’ve invested in a specific area and the value of their property has hardly seen any capital growth.
With the recent landlord seminar evening I hosted at the York Marriott Hotel, I reflected on how the York property market has performed over the last 20 years, and how compelling York property has been to invest in, growing by circa 303.41% in value over this time. Discussing the above reminded me of that property investment phrase and got me pondering, does York property double in value every ten years?
Looking at Land Registry data, a whopping 87,929 properties have changed hands in York from January 1995 to July 2018. Since Jan 1995, where the average York property would have set you back, £56,382, the first time York average property prices doubled was July 2002, when property prices rose to £115,410 (7 ½ years).
The next time the average York property doubled in value from this stage was March 2016, where values rose to £230,917 (13 2/3 years). Given we have been through a property crash which caused property prices to fall by 18% on average across a 15 month period.
When property prices started to recover (February 2009, where the average price of a property in York was valued at £164,961), values have increased, to date, by approximately £761 per month. This would mean that if you bought a property in York at this time, you could expect your property to have doubled in value by March 2027 assuming a straight-line method of appreciation.
Broken down on a more granular level, which types of properties have been the front runners? Well detached properties invariably hold the greatest value in the York property market, being valued at on average in excess of £400,000 as at September 2018. Next are your semi-detached worth on average circa £260k, mid-terraced houses, £220k and your flats valued at £168k. So detached homes must have seen the most capital appreciation over the last 20 years, right?
Well upon closer inspection, York property value types have increased since Jan 1995 to Sept 2018 as follows:
So, on balance, your detached homes are one of the weaker performers (but still fantastic capital growth) shadowing flats and apartments by an additional 20%. It comes as no surprise that York terraced homes were the trailblazers given that they make up a substantial proportion of the Prime-York property market.
In answer to the debate as to whether properties double in value every ten years, well it really depends on when you invest, where you invest and what you invest in. If the last twenty years should have taught us anything, it’s that, like the stock exchange, one cannot time the market.
The individuals who bought property at the tail end of 2007, whilst their property values diminished by approximately 18%, suffice to say they were not forced to sell in a down-market, can take solace in the fact that their investments have increased in value by 53%. So, even those unfortunate to suffer the ‘winners curse’, will have since made their money back and then some.
What I do feel confident about is that York property prices, based on historic trends will continue to rise in the long run and that is how every landlord and property investor should plan their investment journey and not just short-term money-making schemes.
If you require any assistance in where to invest in property, then please feel free to get in touch.