According to Office for National Statistics (ONS) figures, the lowest property price growth in the country was in the North East. In the 12 months to June 2022, average property prices rose by just 3.6%. In the month from May 2022 to June 2022, average prices fell by 10.9%
The North East of the country also recorded the lowest average property price in the country, standing at £158,000.
There will be some people viewing this negatively. If you are a homeowner, you want to achieve the best possible price for your home. So, a negative price movement or even low growth isn’t too appealing. The thing is though, the property prices in the North East of the country are of benefit in many ways.
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The way the property market is evolving, and the economic and financial impact people face right now makes this part of the country a far more appealing one to buyers, tenants, landlords and property investors. This means homeowners shouldn’t be too despondent over these figures.
If you’re a property owner, then you may have been worrying about the recent slowing of house price growth. However, there’s no need to worry. In fact, low growth in house prices can actually be a good thing for homeowners.
Slower house price growth means that your home is less likely to lose value. Over the last few years, we’ve seen house prices increase at an unsustainable rate. This has led to many people taking on mortgages that are larger than the value of their homes. As a result, when house prices start to fall (as they always do at some point), these people are left in negative equity. This means that they owe more on their mortgage than their home is worth, and it can be very difficult to sell up and move on as a result.
Stability is crucial in property market
With slower house price growth, this is less likely to happen. Your home will still increase in value over time, but at a sustainable rate. This means that even if there is a market correction, your home is unlikely to lose value, and you’ll be able to sell it without any problems.
Slowly rising house prices also mean that it’s easier to pay off your mortgage. Given the increase in interest rates and general concern about mortgage payments, this isn’t a bad situation to have.
When house prices are increasing rapidly, it can feel like you’re never going to get ahead on your mortgage repayments. However, with slower growth, your repayments will start to catch up with the actual value of your home much sooner. As a result, you’ll be debt-free much sooner than you would have been otherwise. And what’s not to like about that?
Hopefully you see there are reasons why slower growth in house prices can actually be good for homeowners. Of course, if you’re hoping to sell your home in the near future, then you may be disappointed. But if you’re happy to stay put for the long run, then there’s nothing to worry about.
Contact Urban BASE for all your property market needs
If you would like to arrange an appointment to discuss your next move in the property market, we are always happy to help. Call us on 0845 6431186 today.