We often see figures such as the “average cost of property in the UK” splashed all over the media when markets are flying high or in the doldrums. While in theory this is a very easy way to monitor the general UK property market is there such a thing as an average property in the UK? The cost of living in the north of England is very different to that in the south so are we not comparing apples and pears?
If you’re looking to buy property local to you or perhaps you have your eye on property in the immediate vicinity of where you live, how do you best get a feel for the local marketplace?
For sale signs
While many people judge the underline activity in the construction industry using the so-called “crane index”, which simply counts the number of cranes visible, counting the number of for sale signs can be a useful indicator. In theory, in times of trouble and in times of great wealth we should see an increase in sale sign activity as homeowners look to move up or down the property ladder. In reality, we tend to see the most for sale signs in times of trouble when many people are struggling to pay their mortgage and looking to downsize or release capital.
If there are a growing number of for sale signs in your region the chances are that house prices are softening and there are more sellers than buyers. If you believe the long-term potential is positive then this may be an opportunity to pick up property on a short-term dip.
Local economy
We hear news about economic regions across the UK, some of the larger cities and some of the larger towns. Again, quoting figures which cover a specific area only shows the consensus for the area as a whole as opposed to the prospects and potential issues in specific areas. As a consequence, if you want to find out how your local economy is doing simply check the local news websites and newspapers. Are there more companies creating jobs as opposed to cutting jobs? Are there any new companies relocating to the region? Perhaps some local employers are moving elsewhere or businesses are closing down?
Very quickly you will get an impression of what is going on, what the short to medium term future holds and this will also have an impact upon your long-term forecast. Nothing beats local knowledge on the ground, rumours, counter rumours and news about investment, job opportunities, etc. Sometimes it is easy to get drawn in by the mass media highlighting average movement in property prices across a region but how is your local vicinity impacted?
Go with your gut feeling
There will be times when the national and international economic environment changes and this will have a dramatic effect across the board. It could move economies up a notch or down a notch and have a significant impact upon household income, property markets and employment. In many ways while this is out of your control, although you will have to monitor it, you can constantly monitor your local economy and property market.
Once you have mastered the art of reading your local economy and local property market you can replicate this in other niche areas. The principle is the same but the figures, the trends and the swings will differ.