Price of Property outside the scope of first-time buyers

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Price of Property outside the scope of first-time buyers

Inflation, then, has in many ways been kind to owner-occupiers. Figures below shows how house prices have risen since 2000. It can be seen that there have been two great 'leaps' -the first in 2002 to 2004 and the second in 2015 - 15..


  • In between these surges, however, there have been slack periods where prices on the whole have risen more slowly than the rate of inflation. Buyers who have benefited most are those who have timed their purchase just before one of the periodic jumps in house prices.

    Table 1 Average house prices since 2002


    2002 1055,000

    2003 125,650

    2004 137,420

    2005 140,020

    2006 171,100

    2007 181,945

    2008 192,759

    2009 203,712

    2010 215,674

    2011 206,143

    2012 200,514

    2013 214,503

    2015 224,577


Maintenance costs for first-time property owners
Analysis of household spending shows running costs for the average first-time homeowners are increasing below the inflation rate - but that gas and electricity bills now make up almost a fifth of the bill.


It generally costs £9,590 per annum to maintain a home, a 1.9% increase on the £9,411 it cost in 2012, according to the bank of Halifax. This compares to a greater 2.7 per cent rise in the consumer price index gauge of inflation, especially property in the South West.

Maintenance and repair costs
Halifax assessed building maintenance and repair costs, bills, insurance, council tax and maintenance costs. The analysis took into account mortgage payments, but not rents, which have gone up faster. Costs of jobs such as plumbing and electricians are always going up, especially if you want someone reliable.


Martin Ellis, the housing economist at Halifax, stated that the typical costs of having and running a home have again gone up slightly over the past 12 months, but this rise was under the general increase in the price of living.


Overall, the price of owning a home has gone up by two per cent over the last five years, representing a big decline in real terms. Lower mortgage payments have offset rises in other items of housing-related expense, such as the big rises in electricity and gas bills.


Read More oncompare mortgages

The effects of inflation

Buying a property entails as far as most people are concerned borrowing the money to do so. At times of high inflation, it is an excellent idea to buy a property, the value of which is probably increasing at least in line with inflation, by means of a fixed loan.

The technical term used here is 'gearing'. If you borrow 118000 to buy a house costing £120,000, for example, and it appreciates by 0.2 a year for the next three years, it will be worth 134560 at the end of that time -that's 114560 profit for the 12000 that you put down.

Obviously, you will have been paying interest on the loan in the meantime (and possibly repaying a bit of capital), but, when you consider . . .... see: The effects of inflation

Current Mortgage Offers

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