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Appreciation of property value

Why are property prices in BR6 jumped so much? Appears to be appreciated by quite a margin over the last one/two years. Is this a bubble?

Asked on Jan 18 2014, House Prices in Orpington | Report content

Answers (1)

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  • Hi, There are a number of reasons for the wave of property price rises on both a national and regional level over the past couple of years. If we look first at the national appreciation, the past two years have really been the time in which the market has started to recover from the severe downturn it took in the midst of the global financial crisis around 2008 time. The economy starting to (slowly) pick up and the fact that people who were unemployed have started to find work again (particularly in 2013) has started to increase demand again. On top of this, there has been an increase in the number of affordable mortgages, with the government's Help to Buy and Funding for Lending schemes both making it far easier to get a house purchase loan. Again, this has helped to push up the demand for homes, which is a stark contrast to the years that came before, and can lead to a jarring change in prices over a relatively short period. However, I would say that we aren't quite entering the territory where we need to worry about a property bubble yet. House prices should climb by around eight per cent nationally this year, but they are still far below peak levels seen in 2007, so there's room for growth still, in my opinion. In terms of a regional reason for price rises in BR6 specifically, I would theorise that it has something to do with the London effect. As you may know, the capital has been something of its own micro-market since the economic downturn, with prices originally holding while they fell elsewhere, before rising far quicker than in any other region. The knock-on effect that this has had is that many people in the last few years have decided that it is far too expensive for them to live in London itself, and are looking further afield for places they can commute from in the likes of Kent and Essex. As BR6 is in the former county, it is likely it has seen a sharp rise in demand in recent years, particularly of city workers with money to spend, which will have inflated property prices quite a bit more than might have been expected. Many thanks, Scott

    Answered on Jan 24 2014, Report content

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