You can call the UK’s property market an uncertain one all you want, but the lack of affordable houses – and the price growth that comes with it – is here to stay, experts say.
A new report has now been released by eMoov and it predicts that average property values in London could increase by a mind blowing 80% by 2027, to £867,000, and go up to almost £3 million another decade later.
The report had a closer look at house price data from the Land Registry over the past 20 years and used its findings to calculate the potential increases in the 20 years to come.
For the last 10 years, since 1996, the primary driver for house price growth has always been a shortage of affordable housing. In England, house prices have seen an incredible increase of 320% between 1997 and today, from £56,000 to £234,000.
Property experts voiced their opinion by stating that the lack of affordable housing, combined with an ever-growing population, will continue to be the central issue in the country’s housing market for at least another ten years.
“This research highlights the near impossible task faced by the next generation of aspirational buyers and acts as a warning to the government should they fail to address the current lack of property available, which is seeing prices once again reach dangerously inflated levels,” says Russell Quirk, eMoov.co.uk.
However, the eMoov didn’t take the stretched affordability of buyers into account when putting together the recent study.
“With the negative combination of the rising cost of living eating away at modest pay increases, it is hard to see how property prices can keep rising at a fast pace,” says Miles Shipside, Rightmove director.
“If it becomes impossible to buy, sellers will also take a hit on the price of their home due to a drop in demand.”
The ones to benefit from the current situation? The rental market and its inhabitants.
Renting is here to stay, very little will change about this any time soon. More than half of Britain’s renters are already 30 years and older and one third of them have children. So the only thing that may change is that renters may start staying in the same place for longer.