As we are now nicely into 2024, it's certain the Romford housing market over the last 18 months has been a little more restrained than 2020, 2021 and early 2022, and I believe that the ‘steady as she goes’ outlook will continue into the rest of 2024 and beyond.
As property ownership is a medium to long-term investment, it is important to see what has happened to Romford house prices.
Since the start of the Millennium (Jan 2001), the average Romford homeowner has seen their property’s value rise by an average of 280%.
This is important as house prices are a national obsession and tied into the health of the UK economy as a whole. Most of that gain has come from the overall growth in Romford property values, while some of it will have been enhanced by extending, modernising or developing their Romford home.
Taking a look at the different types of property in Romford and the profit made by each type, it makes interesting reading:
- Overall Average For All Homes in Romford. The average price of all homes in Romford in 2001 was £107,256. Now it's 2024, it has risen to £403,455. This is a total profit of £296,199 (which is £12,878 profit per year per home or an annual growth of 12.2% per year).
- Apartments in Romford. The average price of an apartment in Romford in 2001 was £69,799. Now it's 2024, it has risen to £251,849. This is a total profit of £182,050 (which is £7,915 profit per year per home or an annual growth of 11.4% per year).
- Terraced/Town Houses in Romford. The average price of a terraced/town house in Romford in 2001 was £104,304. Now it's 2024, it has risen to £394,650. This is a total profit of £290,346 (which is £12,624 profit per year per home or an annual growth of 12.1% per year).
- Semi-Detached Homes in Romford. The average price of a semi-detached home in Romford in 2001 was £127,540. Now it's 2024, it has risen to £464,722. This is a total profit of £337,182 (which is £14,660 profit per year per home or an annual growth of 11.6% per year).
- Detached Homes in Romford. The average price of a detached home in Romford in 2001 was £199,110. Now it's 2024, it has risen to £818,879. This is a total profit of £619,769 (which is £26,946 profit per year per home or an annual growth of 13.5% per year).
However, we can’t forget there has been 79% inflation over those 23 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we take into account inflation
since 2001, the true ‘spending power’ of that profit has been lower.
- Overall Average For All Homes in Romford. The total 'real profit' (i.e., after inflation has been removed) for the average Romford home is £164,830 for the last 23 years. This equates to £7,166 'real' profit per annum.
- Romford Apartments. The total 'real profit' (i.e., after inflation has been removed) for the average Romford apartment is £101,308 for the last 23 years. This equates to £4,404 'real' profit per annum.
- Romford Terraced/Town Houses. The total 'real profit' (i.e., after inflation has been removed) for the average Romford terraced/town house is £161,573 for the last 23 years. This equates to £7,025 'real' profit per annum.
- Romford Semi-Detached Homes. The total 'real profit' (i.e., after inflation has been removed) for the average Romford semi-detached home is £187,636 for the last 23 years. This equates to £8,158 'real' profit per annum.
- Romford Detached Homes. The total 'real profit' (i.e., after inflation has been removed) for the average Romford detached home is £344,891 for the last 23 years. This equates to £14,995 'real' profit per annum.
Thus, the annual profit for an average Romford home, adjusted for inflation, stands at £7,166.
I wanted to illustrate that despite the 2008/09 Credit Crunch property market crash, which saw Romford property values plummet by 15% to 20% over 18 months, homeowners in Romford have still fared better over the long term than those renting.
Looking ahead, a common question I get asked is about the future trajectory of the Romford property market.
The primary influence on maintaining house price growth in Romford over the medium to long term will be the construction of new homes locally and nationally. Although we have yet to get the figures for 2023, government sources indicate that the number of new households is expected to be between 210,000 and 220,000. Considering the annual need is for 300,000 new households to meet demands arising from factors such as immigration, increased life expectancy, higher divorce rates, and later cohabitation, it’s clear that demand will continue to outstrip supply unless the government heavily invests in building council houses.
This can only be good news for Romford homeowners.
What about Romford landlords, though?
Even though the number of landlords liquidating their property portfolios has increased in the last couple of years and the number of landlords buying is lower than in the 2000s and 2010s, there is still net growth in the size of the private rented sector each year. This is all despite facing higher taxes. The simple fact is many Romford landlords remain keen on expanding their portfolios in the long term.
The younger generation in Romford views renting as a choice that offers flexibility and alternatives that homeownership does not provide. This means that demand for rentals will keep growing, allowing landlords to enjoy rising rents and capital appreciation. However, Romford buy-to-let landlords must adopt more thoughtful strategies to maintain profitable returns from their investments.
As a Romford buy-to-let landlord, the question for you is how to ensure this growth continues.
Since the 1990s, generating profits from buy-to-let property investments was straightforward. Moving forward, with changes in the tax laws and the balance of power, achieving similar returns will be more effortful. Over the past decade, I've observed the evolution of agents from mere rent collectors to strategic portfolio managers. I, along with a select few agents in Romford, am adept at providing comprehensive, strategic portfolio leadership. This service offers a structured overview of your investment goals across short, medium and long-term horizons, focusing on your expected returns, yields and capital growth. If you seek such advice, feel free to contact your current agent or me directly at no cost or obligation.