If 50 year trends continue then in 2038 your average home will cost over a million pounds!
In this article we discuss the causes behind house price rises and look at where we will be in 20 years if the current trends continue.
We are asked on a daily basis, “Is this the right time to buy?“. In the short-term there are definitely booms and busts making one year a better time to buy than another. Unfortunately accurately predicting short-term movements in pricing in near impossible.
Fortunately, most of us are buying a home as a long term investment. Either as a place to live, and then either sell or pass on to family members, or as a property to rent.
We have looked back at the UK average property prices over the last 70 years and there is a clear trend, that UK average house prices just keep on going up and up.
On average property prices have risen by 7.8% per annum on a consistent basis. There have been booms and busts to this over the years however after every bust, prices return to pre-boom levels and then continue to grow and grow.
Therefore in answer to the question, “Is now a good time to buy?”. YES. Every year you put off buying and investing your money into the property market you are hurting your pocket.
Particularly with current mortgage rates at an all time low, this is the best time to invest in recent years. Of course we recommend that you only ever invest within your limits, don’t set yourself up with monthly payments that you will struggle to meet.
Why Do Property Prices Keep Going Up?
The UK Population has been growing by over 4% each year, which squeezes the housing market by generating more demand for housing.
There are currently 65 Million+ people who call the UK home, and this expected to increase to 76 Million by 2045. This is the equivalent of another city the size of London appearing in the next 25 years.
All of these extra people need places to work and food to eat. This means that there is more demand for commercial premises and agricultural land. And of course our small island isn’t growing anytime soon! These three elements combined make land more and more expensive each year.
Combine this with increasing inflation which pushes up the cost of building materials and the result is ever increasing home values.
If you aren’t already on the housing market, it is time to make a move!
Nationwide House Price Raw Data
UK Government Population Raw Data
Analysis and Infographic by Simon Loftus of Charles Rose Estate Agents