House prices are showing no signs of slowing down, as evidenced by the latest ONS House Price Index which shows that UK house prices rose by 9.0% in the year to March 2016, up from the annual growth rate of 7.6% recorded in the year to February – and putting the price of a typical home at £292,000. The question is, what if prices continue on this path for the long term? Well, eMoov.co.uk has taken a look, and the results may surprise you…
The estate agent has mapped out what the average house price across England, Scotland and Wales could look like by 2030, based on the increase in UK property values between 2000 and 2015. They found that property prices had increased by 84% during that time, and if they rose by the same rate in the next 15 years, the average house price across England could be as much as £457,433.
This highlights the growing difficulty many people could face in getting on the housing ladder in the years ahead, and it could soon be difficult to find a property that's worth less than a quarter of a million pounds. In fact, based on the current market, eMoov estimates that the only areas of England that will offer an average house price under £280,000 in 15 years' time are Merseyside (£275,074), East Riding of Yorkshire (£277,411) and Durham (£279,985), while 12 English counties will boast house prices of more than £500m.
Home buyers in London could face an even tougher challenge, as although average prices in the capital are already almost at the half a million mark, they could easily set you back over £1m in 2030. Even the most "affordable" area of Barking and Dagenham will have average house prices of over £450,000, compared with £246,000 today, while properties in Kensington and Chelsea are set to average a whopping £3.4m.
If you're looking to get more from your money in 2030, it could be prudent to head to Wales or Scotland: the average house price in Wales is estimated to hit £307,712 by 2030 - £150,000 cheaper than in England – while prices in Scotland could be even lower at £297,222, which clocks in below the ONS' current average figure.
"The past 15 years have seen extreme growth in the price commanded for UK property, as well as a crash as a direct result of this inflated growth," said CEO of eMoov.co.uk, Russell Quirk. "Although this research is only a projection of what may happen by 2030, it is safe to assume that with prices continuing to spiral beyond affordability, history could well repeat itself.
"Although rising prices are always good news for current homeowners, it's extremely worrying to look at the difficulty many have in getting on the ladder at the moment, let alone with a price jump of 84% by 2030. [The figures] highlight just how dangerous this current artificial inflation of the market could be in the long run; it's not just London that will become beyond the reach of the average UK homebuyer, the issue will spread the length and breadth of England, Scotland and Wales."
House prices may be spiralling, but the best way to keep your home move as affordable as possible is to find the right mortgage deal to suit your needs. That way, you may only need to stump up a small deposit to get a low-rate mortgage that can keep your repayments in check, which can set you up in good stead for future price rises.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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