House Prices - A Double-Edged Sword?

Further evidence of just how lucky L and I have been in buying our first home this year. Apparently, Hemel Hempstead is the least affordable place for first-time buyers to get on the property ladder, with houses costing an average of almost 12 times the income of a first-time buyer. Granted, working and living in London, our income when we bought the place was well above what we could have got in Hemel itself but not to that sort of extent.

Of course, the real picture is much more complicated than this statistic implies. Hemel does have quite a lot of property at more affordable levels but the town also has areas that push up the average considerably. Areas such as the old town and Boxmoor, which pre-date the New Town build of the sixties, are more desirable and hence more expensive and the new developments alongside the Grand Union canal at Apsley Lock.

In the last couple of weeks, looking through the property section of the local paper, I've seen a couple of similar properties to ours for sale, both of them for more than we paid for ours. By my reckoning, if we were to put it on the market again now, less than two months after completion, the asking price would be 10k more than we paid for it, at least. That is, more truthfully, a reflection of the increase in prices since we agreed the price we bought at back in October last year but is still a good return, if you ask me.

Hopefully, prices will continue to rise so that, when we come to sell in a few years, we'll have a bit of capital behind us to take into our next home. However, this could be a double-edged sword. The property is not suitable for large families so the target market when trying to sell it is that of the first-time buyers and couples with young families. If first-timers are priced out of the market completely, then we may find it more difficult to sell when we come to it.

That's all well into the future, though, and we're not going to expend any effort worrying about it now. No, we just want to enjoy the place for now and work at making it our home. Whatever tomorrow may bring, we'll cope with it when it arrives.