New research suggests that property investors may have reason to be optimistic about the current trend of property price depreciation. The study, which analyzed property data dating back to 2005, found that periods of house price decline typically lasted only a matter of months before the market bounced back.

The researchers examined 32 periods of house price decline in Britain since 2005, with most consisting of singular monthly drops, while the longest decline spanned 10 months. On average, these declines lasted 2.2 months and impacted approximately 69,766 property sellers per month, totalling 704 transactions. In contrast, the research found 32 periods of house price growth during the same period, with the longest period of growth running for 19 months in 2015. On average, an estimated 381,452 homes were sold during these growth periods, providing benefits to around 85,961 property sellers per month. These results suggest that the benefits of periods of growth far outweighed the negatives of the market declines.

Furthermore, the research identified geographical differences across the British nations, with England experiencing the longest market declines as well as the longest periods of growth. Scotland's market saw an average decline duration of 2 months and an average growth duration of 2.6 months, while Wales experienced the shortest average decline duration of 1.5 months and average growth durations of 2.3 months.

Colby Short, Co-founder and CEO of GetAgent, which conducted the research, commented on the findings, saying: “Last week’s UK House Price Index revealed the first signs of a house price downturn, with the monthly rate of growth dropping for the first time since October 2021. This may understandably come as a cause for concern for the nation’s home sellers, but the chances are they have nothing to worry about in the long term."

However, Short noted that although historical data can be a valuable tool in understanding the past performance of the market, it does not guarantee future trends. Property prices are subject to a range of economic and political factors, which can cause fluctuations in the market.

Furthermore, recent rate rises by the Bank of England may put pressure on property investors in the coming months. Although many on tracker mortgages may still be on a lower rate than most current fixed-deals, the rate increase is likely to impact the market.

Despite these potential challenges, the research suggests that the current decline in property prices is likely to be short-lived, and that property prices will likely continue to show growth in the long term. Of course, predicting future trends in the property market is never easy, but investors can take comfort in the fact that past trends suggest that any downward price movement is generally short-lived and marginal.