Gary Oxborough is Practice Principal here at Barlow Irvin Financial Services. By the time you read this, Euro 2020 will have started, and England will have played (and hopefully won) their first game. Gary reflects on Euro 1996 and where the property market was all those years ago, to where they are today.
I can’t believe it’s a quarter of a century ago, that we all got so excited about football coming home. I remember very well, being 25 years old and loving every minute of that summer, at least until we came up against the Germans in yet another penalty shoot-out!
While I was reading about this year’s tournament and trying to decide if I should get over-excited about England’s chances again, I started wondering how the world of housing and mortgages of today, compares to that beautiful summer of 1996.
According to Land Registry data, the average house price in England during June 1996 was £54,093. The latest figure available for this year (March) is £274,615. That’s some increase! Of course, there have been some downs as well as ups over that time, but the long-term trend is certainly upwards. Who knows what is going to happen to prices over the next 25 years, can they really continue to increase at the same rate?
What about interest rates? The Bank of England base rate stood at 5.69% in June 1996 and had been around 5-7% for quite some time. Today, it stands at 0.1%. To put that into some perspective, borrowing £100,000 over 25 years on a repayment mortgage, using the average building society rate at that time (6.45%) would cost you £672 pm. Today, that average rate would be under 2%, assuming a 25% deposit, which would bring the payments down to around £400 pm. That’s some change the other way.
Although the higher house prices create an issue for some, especially first-time buyers, for existing homeowners, these higher property valuations and lower borrowing costs are a great combination – almost like Shearer and Sheringham!
Here’s hoping we have a great Euro 2020 and maybe, just maybe, it might come home this time?
Time to Talk
Even if you have only just started to think about getting on the property ladder, why not get in touch for a chat. Call Gary on 01204 304 814.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.