Capital appreciation covering the costs of running a property

by Property118.com News Team

9:27 AM, 22nd October 2020
About a month ago

Capital appreciation covering the costs of running a property

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Capital appreciation covering the costs of running a property

Research from GetAgent.co.uk has found that nearly half of all properties pay for themselves when it comes to the average annual cost of upkeep and the increase in capital appreciation.

GetAgent.co.uk looked at each local authority in England and the total current upkeep costs of a property on an annual basis, based on: annual council tax bill, cost of gas, electricity, water, insurance and maintenance.

They then looked at annual house price growth in each area of England to see where properties were paying for themselves, based on this house price growth matching or exceeding these primary running costs.

The figures show that across England as a whole, the average homeowner pays out annual upkeep costs on their property to the tune of £6,046, This includes £1,818 in council tax, £1,139 in energy costs, £397 on water, £146 in insurance and £2,547 in maintenance.

However, the average house price in England has increased by £6,220 in the last year, meaning that owning a property has paid for itself with an additional £174 left in the kitty.

Looking on a regional level, house price appreciation has also more than covered upkeep costs in the West Midlands, the East Midlands, Yorkshire and the Humber and the North West.

Unfortunately, the same can’t be said in the South East, the East of England, the North East, London and the South West. Homeowners in the South East have been worse off, house prices in the region have increased by £3,185 in the last year, while annual upkeep costs come in at £6,846.

When looking at upkeep costs vs house price appreciation at local authority level, 43% of areas have seen the average property increase in price at a greater rate than the annual cost of property upkeep in that area.

The top five best performers are in London, with Hammersmith and Fulham top of the table. The annual cost of upkeep on a home in the borough is currently £10,481. Although a hefty sum, house prices have increased by £44,525 in the last year, leaving homeowners a profit of £34,044 once upkeep costs have been accounted for.

Outside of London, Sevenoaks is the areas where a property pays for itself with the largest proportion of house price appreciation left over. Property prices have climbed by £28,685 in the last year, leaving £20,469 once the annual upkeep cost of £8,216 has been accounted for.

Founder and CEO of GetAgent.co.uk, Colby Short, commented: “It’s been a topsy turvy last 12 months that’s included Brexit uncertainty, a pandemic market deep-freeze and an atmospheric, stamp duty fuelled return to form where house price growth is concerned.

The market has stood firm through it all and while homebuyers have been scrambling to save on stamp duty, many existing homeowners have seen their property pretty much pay for itself in terms of upkeep costs and annual price appreciation.

Of course, we don’t suggest using your house as a giant ATM, but it does show how a bricks and mortar investment is largely the best one you can make and how maintaining it is certainly money well spent.”

Table shows what level of annual house price growth is left in each region once annual upkeep costs have been taken into consideration
Location Total Annual Upkeep Costs Average House Price (July 2020) House Price Change (£) House Price Change – Running Costs
West Midlands £5,610 £206,244 £8,569 £2,959
East Midlands £5,564 £201,608 £8,128 £2,564
Yorkshire and the Humber £5,264 £171,325 £6,335 £1,071
North West £5,281 £171,956 £5,838 £557
South West £6,240 £263,353 £5,176 -£1,064
London £8,055 £484,864 £6,359 -£1,696
North East £4,987 £132,161 £2,317 -£2,671
East of England £6,464 £294,876 £3,512 -£2,952
South East £6,845 £325,734 £3,185 -£3,660
England £6,046 £254,688 £6,220 £174
Table shows the top 10 best areas for the highest level of annual house price growth once annual upkeep costs have been taken into consideration
Location Total Annual Upkeep Costs Average House Price (July 2020) House Price Change (£) House Price Change – Running Costs
Hammersmith & Fulham £10,481 £769,374 £44,525 £34,044
Wandsworth £8,736 £627,363 £41,980 £33,244
Richmond upon Thames £10,483 £694,885 £39,958 £29,474
Hackney £9,103 £592,879 £34,846 £25,743
Waltham Forest £7,925 £450,187 £31,465 £23,540
City of London £10,537 £786,760 £31,134 £20,596
Sevenoaks £8,216 £457,896 £28,685 £20,469
Merton £8,569 £529,257 £26,814 £18,245
Epsom & Ewell £8,421 £474,274 £26,055 £17,634
Rutland £7,060 £329,473 £23,881 £16,822
Sources N/A N/A N/A

The below tables show the same information as above, but with a further breakdown of each annual upkeep cost and the source for each data point.


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Comments

Mick Roberts

13:02 PM, 22nd October 2020
About a month ago

Interesting.
Be nice to see if just rentals are lower with the maintenance or more.

Kathy Evans

19:10 PM, 23rd October 2020
About a month ago

Hmmm, we've had only capital depreciation taken over 10 years, so I don't know how they get their figures. Prices still about 20-25% down on what they were 10 years ago

Badger

19:18 PM, 24th October 2020
About a month ago

Reply to the comment left by Kathy Evans at 23/10/2020 - 19:10
Which area are you in, Kathy?

Kathy Evans

22:47 PM, 24th October 2020
About a month ago

Reply to the comment left by Badger at 24/10/2020 - 19:18
North-East


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