Although nobody has a crystal ball, past growth trends can be a good indicator of how well a property is likely to increase in capital value in the future. And it’s important to have an idea of what a property might be worth in 10 or 20 years’ time because you want to invest in something that will ideally outperform inflation, so that you make money via equity growth as well as rental profit.

If you’ve owned your property for 10 years or more already, you can ask a good local agent for an up-to-date valuation and calculate what the average annual growth has been – you can find various compound annual growth calculators online. But if you’re making a new investment or have only owned your property for a few years, you can search by area and property type on the Land Registry website.

For example, looking at different towns and cities across the UK, since 2005 – which includes a boom and few busts, there is a huge variation in how well each has performed. According to Propertychecklists.co.uk, who have analysed the government’s Land Registry data:

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“Out of 30 cities, since 2005, property prices have risen above inflation in nine cities/towns, including Leicester and Milton Keynes, on par with inflation is Croydon and Tunbridge Wells, and in all the remaining towns and cities, price growth has remained below inflation.”

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Since 2005, Manchester is the best performer, growing at 5.1% on average each year – versus inflation of around 3%. Growing a little less are London, Bristol and Cambridge. But, many have not performed so well, with Newcastle upon Tyne growing at 2% per year and Belfast and Aberdeen growing at less than 3%. This means, overtime, according to the ‘average’ properties have lost value in these areas and those that invested in cash, paid the costs to purchase and maintain them, will only have made losses, although the rental income may mean overall, a profit has been made. To see how each city/town has performed, visit Propertychecklists.co.uk, their data is updated monthly.

So one way to assess how well your property has done is to compare it’s growth to local growth rates and see if it has outperformed and then your forecast can take a minimum growth rate – the average annual growth rate for the city/town and the actual your property has achieved and then project what your property might be worth in any number of years.

Its also worth bearing in mind that flats are not, ‘on average’ performing as well as houses, during the pandemic, flat price growth was minimal, it was houses that grew at double digit rates.

The other thing to check is the local authority’s Local Plan, for example. Every Local Authority should have one (but some are failing to produce one) and they explain the need for local housing and economic changes for employment, plus new construction and infrastructure upgrades. If there are likely to be more employment opportunities, more amenities and better transport links over the next 5-10 years, that’s a good indication that more people will want to live in the area. And as long as the market doesn’t become flooded with new housing, a growing economy should ensure prices remain strong.