Predicting The Best Places To Invest In Residential Property

Well the UK property market is certainly grabbing all the headlines at the moment, what with residential and commercial mortgage, restrictions and plummeting property prices. According to data released by the Land Registry, the property prices underwent their largest monthly drop in October 2010 in three years. An influx of homeowners looking to sell up before the notoriously quiet festive period undoubtedly contributed to this fall. Furthermore, RightMove, one of the UK's leading property websites, reported that as of November 2010, desperate homeowners had slashed their asking prices by a huge 3.2 per cent. Not pleasant reading I'm sure you'll agree.

There are currently no signs that the property market will ever regain its pre-recession strength, especially with house prices still fluctuating. Many economists highlight that these prices have actually been slowly but surely increasing from their ultimate lowest back in 2007. However, any hope is further quashed by a recent report by Nationwide Building Society which highlighted that any signs of growth in house prices were substantially weaker in the second half of last year. This definitely doesn't bode well for the property market going into 2011. By looking at some of the biggest property price increases in the past five years (believe it or not, there have been some!) we can look to highlight any trends that could mark the pathway for the property market throughout the rest of 2011.

It should come as no surprise to see London top of list of areas for property price increases in 2010, the average price being a high £341,105 in October 2010, which is a 7.6% increase from October 2009's £316,943. It's not just fuelled by millionaire pads in Mayfair in Chelsea, all 33 boroughs of the capital saw prices rise, some faster than others of course; Redbridge (up 10.2%), Merton (8.9%) and Camden (8.6%) all examples of healthy growth outside the popular/rich areas of London. The fuel in the London property market seems to be foreign buyers and investors seeing London property as a secure investment, especially with the turbulent Eurozone crisis rumbling on.

Property website LSL Property Service/Acadametrics figures showed November 2010 saw the highest average price yet for London at £383,243, the fourth month in a row a peak was reached in 2010. While it might seem out of control to most people, the websites statistics also show the rate of growth is decreasing in London also, in line with the rest of the British property market.

The continual redevelopment of the capital is undoubtedly its main attractive feature to the property searcher. With fantastic transport links and with it being the hub of the media, business and banking worlds, it is unsurprising that the housing market hasn't suffered like the rest of the country. Appealing to both the young professional, growing families and the more established businessman and woman, London is undoubtedly the most exciting and thriving place to live in the UK.

As we can expect, the 2010 report by the Land Registry showed a different story in the North of England than the south. Collectively, the North West saw a decrease in the average property price from £118.838 in October 2009 to £117,868. While this is not a life shattering change, it is still not quite the news any of us were hoping for. However, silver linings shone throughout Wales though as Merthyr Tydfil was recognised as having the biggest price increase between October 2009 and October 2010 of 10.2 per cent - that's on the same calibre as the state of the property market in London. In the rest of England, the best monthly growth was seen in Darlington with a pitiful average price increase of just 3.1 per cent.

While the North and South have always been divided when it comes to culture, accents and banter, this latest contributor of the property market divide marks more interesting debates. Especially when more recent figures suggest that the north and south property markets are, in actual fact, parallel with one another. For example, the driver of the UK property market as a whole is in fact Durham according to the Land Registry. Country Durham saw an increase in property sales by a massive 11.6 per cent and Northumberland saw an average increase in sales by 25.9 per cent in 2010 alone. You couldn't get much more northern could you really?

Let's forget the North/South divide for the time being and concentrate of the national property market as a whole. The average annual rise in property price increases was 3.4 per cent as of October 2010. What is important to note is that house price increases are largely determined by the type of house. Taking this into account, detached homes saw the biggest average increase in price by 4.8 per cent between October 2009 and October 2010 whereas terraced properties saw the smallest increase at just 2.5 per cent. Between these came semi-detached homes with an increase of 3.3 per cent. So no major shocks there really!

So what can we expect for the 2011 market? All the figures point to growth the length and breadth of Britain, all areas and all sectors which points to the fact that a recovery is underway, although it's a slow recovery. We see evidence of house prices beginning to slow again as time moves on, nevertheless certain experts and think tanks are still predicting growth over the New Year and into the first quarter of 2011. Foremost among them being the Centre for Economics and Business Research (CEBR), who predict a 0.8% rise in the UK as a whole and 1.2% within London, not the greatest growth figures but fears of a double dip recession have receded with such predictions floating about, if they turn out to be true, it's good news for us all.

So for anyone who is looking to enter the property market for the first time, or for homeowners looking to move on, then don't despair just yet. While the media is focused on the continuing difficulties within the UK property market, it doesn't mean that finding that dream home is impossible. All the statistics here suggest that living in quieter, suburban areas of all the major cities may well be the best option. With improving transport links, it has never been so easy for commuters to commute to work. Similarly, the desirability factor of living in the quieter areas means that the property markets in those areas are in fact improving with the increasing consumer demand.

Tim writes for http://justcommercialmortgages.com/ the UK's top site for the latest commercail mortgage rates and commercial property finance news.