Is your home ‘earning’ more than you?
Fri 16 Jul 2021
One in five homes has increased in value by more than the average salary in the past year alone. Is it time to check how much your home could be worth?
If you're a homeowner, you could be in for a surprise.
And that’s because one in five homes has ‘earned’ more money by simply existing as bricks and mortar than the average worker has in the past year alone.
In other words, 4.6m privately-owned homes have jumped in value by more than £30,500, the average UK salary, in the past 12 months, latest research shows.
What could this mean for you?
If you are thinking of moving, you may be surprised by how much your home is now worth, particularly if you want to trade up the property ladder.
Russell Maddison, 39 years old, and his wife Hyun Kim (known as Helen), currently live in Barratt London’s Hendon Waterside development in north London.
Just three years after purchasing their one-bedroom apartment, the couple has purchased a larger two-bedroom property in the same development. Maddison explains how.
"We were quite keen on moving into a regeneration area as it helped with our budget, and we did our research, looked at the plans and considered the potential of the whole area, not just what we could see at the time.
"The decision certainly paid off, because just three years later the one-bedroom apartment we had bought for £202,000 was now worth £320,000, thanks mainly to the boost in prices caused by the regeneration of the area.
"I’ve even worked out that the amount we earned on our apartment is close to my salary and this enabled us to purchase a larger two-bedroom apartment in the same development for £465,000.
"It’s a great feeling when you see the prices going up when you have bought at an early stage. But you do have to have a careful eye, you need to be able to see ahead, look at the plans and what is there in the pipeline and try to visualise the end product."
Why is this happening?
Demand from potential buyers has been strong since the housing market reopened after the first national lockdown, with buyers looking for more space and a different lifestyle as they no longer had to commute to work on a daily basis.
The stamp duty holiday has also helped to fuel momentum in the housing market.
Gráinne Gilmore, head of research at Zoopla, said: "Hundreds of thousands of households have made the move into their new home over the last year.
"But activity has been so high, it has eroded the stock of homes for sale, which has put upward pressure on house prices, with values rising by up to 9% in some parts of the country."