Reviewed and updated: 17 October 2026. Original archive publication date retained.
Capital growth describes an increase in an asset’s value over time. In property, it is different from the rent received while the home is owned and different again from the cash left after a sale. Values can also fall.
An index is market context
The UK House Price Index measures changes in property prices using statistical methods designed to account for differences in the mix of homes sold. ONS explains that this produces a constant-quality measure rather than a simple comparison of whichever homes happened to sell in each month.
A local index therefore cannot tell an owner precisely what their particular flat or house would achieve. Condition, tenure and the evidence available at the valuation date still matter.
Measure consistently
If comparing purchase and later sale prices, record the dates and distinguish nominal growth from growth after inflation. Keep acquisition, improvement, financing and disposal costs separate so that a price increase is not mistaken for net profit.
Land Registry’s Price Paid Data can help identify registered transactions in England and Wales, but it is historical evidence rather than a promise of future performance.
Avoid assuming that a past annual growth rate will repeat. A useful appraisal can show alternative outcomes, including no growth or a fall, while clearly identifying assumptions. Rental receipts and outstanding borrowing also need their own treatment.