For some reason negative headlines always get more publicity than positive so we are bombarded with stories about "cost of living increases", "fuel crisis" and a looming recession.
It is quite easy to talk ourselves into a recession. In May there were forecasts of a complete collapse of the housing market, home owners were warned that prices were going to crash. It seems that the forecast doom was premature.
Despite the growing cost of living crisis, Nationwide said that average UK house prices climbed 11% in the last 12 months, with the building society's chief economist, Robert Gardner, adding that the market had “retained a surprising degree of momentum”.
“Demand continues to be supported by strong labour market conditions, where the unemployment rate remains near 50-year lows and with the number of job vacancies close to record highs,” Gardner said. “At the same time, the limited stock of homes on the market has helped keep upward pressure on house prices.”
Is it a good time to invest in your home? My first part of an answer to this question is that it is not a bad time. Material and labour costs are still higher due to Covid, Brexit and the supply of gas and electricity, there are no short term solutions and prices will remain where they are. If you are looking at extensions and developing your home you are unlikely to be at threat from negative equity if the house prices do drop.
The second part of my answer relates to why you are looking to invest in your home, if you need more room for children, are planning a kitchen extension, improving the living space or similar so you can improve your home for yourselves then it's about investing in an improvement of your environment not just your own home. It's hard to put a value on wellbeing.
Making changes to your home is a very personal thing - for most it is more than a financial investment. It is your home, where you live and that is often more important than making money from the changes.