Yesterday’s Daily Express reports the Halifax Building Society House Price Index as stating the “average†house price is rising by £26/day and that house prices have risen for six consecutive months.
http://www.lloydsbankinggroup.com/media1/press_releases/2013_press_releases/halifax/060813_HPI.asp
Good news surely if you are an investor with a handful (or more) of properties? Yes. But do not be blinded by statistics. If the rise is centred upon the capital city (and at one place the article refers to “gravity defying†London price rises thanks to foreign buyers) there is yet, some domestic stimulus by the government and some increase in the provinces, and in particular I can report cautious optimism towards growth in Wales. On my local turf I have noted a small number of properties beginning to sell by private treaty more quickly than I would have expected to see some months ago and on one occasion pointed out to me only today, a bidding competition by two retail buyers actually raising the sale price of a property. So good news really.
Couple this with yesterday’s  Bank of England Monetary Policy Committee’s forward guidance, which implies the base rate will not rise from its historic low of half-a-percent for a further two to three years.Â
Nevertheless, property investment (unless your strategy is to “flipâ€) is generally long-term and I was taught always to calculate net positive cashflow against mortgage repayments at a cautious, nominal 6% or 6.5%.
That said, with house price rises coming into sight, I note there are newer investors in the market who haven’t known the former “good times†and have yet to experience the joy of taking rents AND sitting on an appreciating asset.