Inflation Ravaging the Value of Investment Property -...

New data appears to show that the average UK house price would need to increase by over £13,400 just to keep pace with inflation.

An estate agency has analysed current inflation levels and house price growth across 62 major UK towns and cities to reveal how the current value of bricks and mortar is actually performing when pitted against the wider health of the economy.

Inflation has continued to fall in recent months and the latest figures show that it is now at its lowest point in tow years at 4.6 per cent.

However the latest figures from the Land Registry show that house prices have fallen by 0.1 per cent year on year. This means house price performance is currently trailing inflation to the tune of 4.7 per cent and the average UK house price would have to climb by £13,404 in order to keep up with inflation.

At a local level, every city analysed by the agency, Yopa, is currently underperforming when it comes to the balance between estimated local inflation levels and house price growth.

Oxford is where house prices would need to see the most in monetary value. With the average house price in the city currently sitting at a lofty £498,261, Oxford house prices would have to increase by as much as £22,621 to outpace inflation.

In Brighton the market would need to see a £21,614 boost to the current average house price in order to overcome inflation. In London house prices would have to climb by £20,798 in order to outperform inflation.

Other areas include Cambridge (£19,915), Worthing (£18,198), Bristol (£16,844), Bournemouth (£16,550), Edinburgh (£16,283), Southend (£16,278), Exeter (£16,077) and Basildon (£15,942).

At the other end of the table, Burnley has seen the largest annual decline in house prices at 10.9 per cent. However, with the average house price sitting at just £104,626, the property market would need to see a boost of just £6,455 in order to outperform inflation, the lowest of all areas analysed by Yopa.

An agency spokesperson says: “The property market has proved resilient so far this year and while house price growth has slowed, we simply haven’t seen the drastic market correction that was so widely predicted at the start of the year. Inflation is also falling and this means we’ve likely seen the end of increasing interest rates.”