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omebuyers in the UK should plan to keep their property for at least nine years to avoid losses on your investmentwhile Londoners can expect to return in much less time, according to new research from Middleton Advisors.
A greater number and greater turnover of houses in the capital means that the optimal duration of ownership tends to be shorter than in other, more rural parts of the UK.
“If you’re lucky, the cycle can be shorter in London than it tends to be in the countryside,” says managing director Mark Parkinson. “London behaves much more like an index and may have more turnover as there is a higher volume of similar supply compared to the country market.”
With a high percentage of first and second time buyers, most Londoners don’t typically stay in their properties for close to nine years as their requirements and needs change during this period.
The data shows that people who buy flats and semi-detached properties, which make up the bulk of London’s housing stock, own them for less time than those who buy single-family and semi-detached houses.
Worryingly for many Londoners, the data also pointed out that those dealing on the housing scale tend to be more susceptible to variability in house prices because they are younger, more indebted and own property for shorter periods.
On average in the UK, people hold onto their property for much longer, and research indicates that private sector buyers tend to hold onto their property for an impressive 20.2 years and are making money by doing so.
Over each possible 20-year period since 1952, the value of the median UK home has risen by an average of 8.7 per cent a year, a higher average growth rate than the FT All-Index. Share, which averages 6.8 percent a year. same measure. This means that, at any point in time, if buyers plan to stay in their homes for the long term, they will recoup expenses such as stamp duty and solicitors’ fees, along with some profit.
At the other extreme, research shows that “trading” a property is a much riskier business and has a low average return. There is more than a 22 percent chance of loss on a three-month hold and a 13 percent chance of loss on a one-year hold if you buy and sell property quickly.
All of this suggests that, even in London, if you want to see the best return on investment, you should try to buy a house that you can stay in for as long as possible, and what is more important than time is the property itself.
“Our research shows that bear markets [when prices fall] it can offer a great opportunity for the brave to acquire the house of their dreams”, says Parkinson.
“For those looking to hold a property for the long term, buying the right property is more important than obsessing over time and while supply remains tight, especially in prime markets, well-advised buyers may find they stand a better chance. . to acquire your perfect home in a market where there are fewer home seekers after the same opportunity”.
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