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Paying off your mortgage this year? This is how much …

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While a somewhat slow London property market may be currently trailing the rest of the UK when it comes to the pandemic property price boom, research from debt advisory specialists, Henry Dannell, has found it remains the best place to have purchased a home for those coming to the end of a 25-year mortgage term. 

Henry Dannell looked at which region of the UK has been most profitable for homeowners reaching the momentous life mile market of paying off a mortgage today, based on a 25-year term and after adjusting for inflation. 

Best and worst performing regions

The data shows that London tops the table for those reaching financial freedom in today’s property market. Back in 1997, the average London home was valued at £83,066, or £160,864 after adjusting for inflation. Today, this has soared to £510,102, an inflation-adjusted uplift of £349,238 or 217%. That’s a massive average annual increase of £13,970 (9%) over a 25-year mortgage term. 

Homeowners in the East of England have enjoyed the second-largest increase in the value of their homes during the time it’s taken to pay off their mortgage. House prices in the region are up 199% in the last 25 years – a rise of £227,214.

However, when it comes to actual profit made on their property, those in the South East have seen a bigger return. The average value of a home in the region is up £244,672 (183%) in the last 25 years once adjusted for inflation, an average increase of almost £10,000 every year. 

The South West (175%) and East Midlands (160%) also rank amongst some of the strongest performing areas of the UK.

Even at the bottom of the table, homeowners in Northern Ireland will have seen a 58%, or £159,151, increase in the value of their home over a 25-year mortgage term – that’s a rise of £2,331 each and every year on average. 

Director of Henry Dannell, Geoff Garrett, commented: “Many current homeowners will be understandably concerned about the string of base rate increases that have come since the end of last year and what this means for their monthly mortgage payments.” 

Garrett continued: “However, those coming to the end of a 25-year mortgage term will have a far more balanced view having seen interest rates climb to almost six percent in 2007 before remaining historically low ever since.”

“They are also likely to have made a considerable profit on their purchase, with property values up across the board and by quite some margin.”

 London housing market

When it comes to the London housing market, Garrett was optimistic about its future. Garrett said: “Although London house prices have stuttered during the pandemic in contrast to the far greater increases seen elsewhere around the UK, the region remains by far the best investment when it comes to long term market performance.”

Garrett added: “Our expectation is that, following the recent blip in London house price performance, this market is likely to come back strongly in the short to medium term.”

Table shows the inflation adjusted house price change for homeowners coming to the end of a 25 year mortgage term in today’s market

Location

Average House Price (Jan 1997)

Average House Price (Jan 1997) – Inflation Adjusted

Current Average House Price

Change £

Change %

Average Annual Change £

Average Annual Change %

London

£83,066

£160,864

£510,102

£349,238

217%

£13,970

9%

East of England

£59,081

£114,415

£341,629

£227,214

199%

£9,089

8%

South East

£69,008

£133,640

£378,311

£244,672

183%

£9,787

7%

South West

£57,751

£111,840

£307,468

£195,628

175%

£7,825

7%

East Midlands

£46,775

£90,584

£235,503

£144,919

160%

£5,797

6%

Wales

£43,525

£84,290

£206,251

£121,961

145%

£4,878

6%

West Midlands 

£51,120

£98,998

£235,809

£136,810

138%

£5,472

6%

North West

£44,095

£85,394

£199,791

£114,397

134%

£4,576

5%

Yorkshire & Humber

£44,984

£87,115

£194,525

£107,410

123%

£4,296

5%

Scotland

£43,439

£84,123

£182,786

£98,662

117%

£3,946

5%

North East

£42,353

£82,020

£150,787

£68,767

84%

£2,751

3%

Northern Ireland

£52,086

£100,869

£159,151

£58,282

58%

£2,331

2%

England

£55,789

£108,040

£291,560

£183,520

170%

£7,341

7%

United Kingdom

£60,698

£117,547

£273,762

£156,215

133%

£6,249

5%

https://www.introducertoday.co.uk/breaking-news/2022/3/paying-off-your-mortgage-this-year-this-is-how-much-your-home-has-made