dothesums blog

Link: http://www.dothesums.co.uk/blog

For most of us our house is primarily our home, but we recognise that we are investing a considerable amount of capital in it. Capital that we have worked for and need to protect.

So preferably choose a property with your heart, but of a type and in a location where your head tells you it is safe to do so.

The problem is that it is not always obvious where the value of properties will be maintained?

1) The main influences in value still depend upon the relationship between supply and demand for that type of property, in a particular location.

2) It is likely that your property value will be best protected neither in the top priced, nor the bottom priced locations.

At the top end, prices often have nowhere to go and the premium for living there may disappear as fashion change.

At the very bottom of the market prices may be cheaper, but the aspirations of many buyers and therefore demand, may lie elsewhere.

3) If the local economy is buoyant in present circumstances, prices are probably going to be maintained.

4) The image and the historical performance is not necessarily a good guide.

We have recently compiled reports on two similar properties in two very different parts of the country.

They are not interchangeable in terms of facilities, work opportunites or quality of life, but the results illustrate how we all make assumptions based on pre-conceived ideas.

The two flats have a very different asking price of £580,000 and £110,000, each has two bedrooms, but the apartment with the higher price has obviously more space and facilities.

The result of all our number crunching and probability analyses gives a five-year forecast of the higher priced property of -7.3% and that for the lower priced property as +29.6%.

The £580,000 flat is located in HAMPSTEAD in London and the £110,000 priced property is in NORTH SHIELDS in North East England.