Local Homeowners Pocket £1,500 a Year in Profit Since 2005
As we are now three quarters way through 2025, it’s certain the housing market has been more restrained than the post pandemic 24 months of summer 2020 through to July/August of 2022, and I believe that the ‘steady as she goes’ outlook will continue into the rest of 2025 and beyond.
As we always say in our property market updates, home ownership is a medium to long-term investment, so I feel it’s always important to measure what has happened to Preston house prices over those medium to long terms.
Since the summer of 2005 the average Preston homeowner has seen their property’s value rise by an average of 23%.
This is significant as house prices are a national fascination and sub-consciously tied into the perceived health of the UK economy. Most of that 23% gain has come from the overall growth in all property values, while some of it will have come about by modernising, extending or developing their home.
Analysing the different types of property and the profit made by each type, it makes interesting reading:
- Overall average for all homes in Preston. The average price paid for all homes in Preston in 2005 was £136,427. Now it’s 2025, and it has risen to £166,418. This is a total profit of £29,991 (which is £1,500 profit per year per home or an annual growth of 1.2% per year).
- Apartments in Preston. The average price paid for apartments in Preston in 2005 was £113,271. Now it’s 2025, and it has risen to £131,870. This is a total profit of £18,599 (which is £930 profit per year per home or an annual growth of 0.8% per year).
- Terraced/Town Houses in Preston. The average price paid for all town house/terraced houses in Preston in 2005 was £99,258. Now it’s 2025, and it has risen to £116,045. This is a total profit of £16,787 (which is £839 profit per year per home or an annual growth of 0.9% per year).
- Semi-Detached Homes in Preston. The average price paid for all semis in Preston in 2005 was £131,884. Now it’s 2025, and it has risen to £187,215. This is a total profit of £55,331 (which is £2,767 profit per year per home or an annual growth of 2.1% per year).
- Detached Homes in Preston. The average price paid for all detached homes in Preston in 2005 was £219,295. Now it’s 2025, and it has risen to £246,254. This is a total profit of £26,959 (which is £1,348 profit per year per home or an annual growth of 0.6% per year).
However, we can’t forget there has been 77% inflation over those 20 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we consider inflation since 2005, the true ‘spending power’ of that profit has been lower.
- Overall average for all homes in Preston. The total ‘real profit’ (i.e. after inflation has been deducted) for the average Preston home is £16,925 for the last 20 years. This equates to £846 ‘real’ profit per annum.
- Preston Apartments. The total ‘real profit’ (i.e. after inflation has been deducted) for the average Preston apartment is £10,496 for the last 20 years. This equates to £525 ‘real’ profit per annum.
- Preston Terraced/Town House homes. The total ‘real profit’ (i.e. after inflation has been deducted) for the average Preston town house/terraced home is £9,473 for the last 20 years. This equates to £474 ‘real’ profit per annum.
- Preston Semi-Detached homes. The total ‘real profit’ (i.e. after inflation has been deducted) for the average Preston semi-detached home is £31,225 for the last 20 years. This equates to £1,561 ‘real’ profit per annum.
- Preston Detached homes. The total ‘real profit’ (i.e. after inflation has been removed) for the average Preston detached home is £15,214 for the last 20 years. This equates to £761 ‘real’ profit per annum.
Therefore, the profit for an average home over the last two decades, adjusted for inflation, stands at £846 per year.
We wanted to show you that despite the 2008/09 Credit Crunch property market crash, which saw local property values plummet by 16% to 19% over 18 months, homeowners have still fared better over the long term than those renting.
Looking ahead, a common question I get asked is about the future direction of the local property market.
The main influence on maintaining house price growth over the medium to long term will be the construction of new homes (on the supply side) and employment and interest rates (on the demand side). Although we have yet to get the official figures for 2024, independent sources indicate that the number of new households is expected to be around 217,900. Bearing in mind the annual need is for 300,000 new UK households to meet demands – arising from factors such as increased life expectancy, immigration, and later cohabitation – it’s clear that demand will continue to exceed supply unless the government heavily builds council houses.
This can only be good news for local homeowners.
