HOUSE PRICE ANALYSIS: Why tenure and timing matter to city property prices

Our city tracker demonstrates why average national and regional property prices can distort what is really happening in your area. More than half of the cities we monitor have still not recovered to their 2022 price levels, while others continue to outperform.

That’s why we track more than 30 cities over several different periods, with our data going back as far as 2000. What we’ve consistently shown is that there is no such thing as a permanently ‘best’ or ‘worst’ performing city.

A market that looks fantastic over one period can be one of the weakest over another.

But another interesting factor that Nationwide has considered, which could potentially influence city performance, is how often people actually move can influence what’s happening to prices in the area.

In this month’s report, Nationwide’s analysis of the English Housing Survey shows people stay in their homes for an average of around 14 years, rising to nearly 24 years for those who own outright.

This helps put our longer-term city tracking into perspective: the property market experienced by an individual homeowner can look very different depending on when they bought and when they eventually come to sell.

However, the length of time people stay in a home differs depending on which tenure they are in.

And there are also substantial differences between those who own with a mortgage, own outright or rent.

And it could be that this influences what happens to prices in a city too – depending on the proportion of households in each tenure and the level of ownership, this could impact on affordability.

For example in London prices are partly being held back due to property values hitting the ‘affordability buffer’ but potentially because more homes are purchased with a mortgage and less owned outright.

So for homeowners in particular, timing really does matter. Someone who has owned for 20 or 30 years may have experienced a completely different property market from someone who bought in the same city in 2022.

And that’s why judging whether a city is performing ‘well’ or ‘badly’ depends enormously on where and when, as a seller, they bought and what they are planning on buying next.

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Author: Gemma