Despite being the year that wasn’t, 2020 did have a positive effect on one thing: UK house prices. By December, the average property cost £239,927, a 7% rise compared to 2019. Here’s what else we can expect.
Are UK house prices set to rise further?
According to regulated house buyers Good Move, average UK house prices are set to rise by 17% over the next ten years.
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Their research analysed property prices over the last 40 years and using this data, they predicted what might happen between now and 2050.
Their findings revealed that between 1980 and 2020, house prices had only dipped once in four decades.
Between 1990 and 1995, the average price fell from £58,250 to £55,437. But by 2000, property was back on track with the average sales value rising by around 36% to £75,630.
Based on their data, Good Move predicts a steady increase over the next three decades. In 30 years’ time, the average property price is likely to reach an eye-watering £392,301, an increase of 64%. Their final predictions are:
- 2025: £251,476
- 2030: £279,641
- 2035: £307,806
- 2040: £335,971
- 2045: £364,136
- 2050: £392,301
What could derail the rise in UK house prices?
Part of the property success story in 2020 can be put down to the stamp duty holiday. Not only did that make it a prime time to buy, it also meant that home buyers were able to stretch themselves a little further, buying slightly more expensive homes.
Plus, we can’t forget that being locked down has given more of us an opportunity to save. For some, perhaps that’s led to securing a mortgage and climbing up the property ladder quicker than expected.
So, is our current property bubble likely to carry on or come to a crashing end? Ultimately, it all depends on how the next few years pan out.
If working from home sticks around (and there’s no reason to think it won’t) the current desire to move out of cities could encourage prices to level out and remain steady. On the flip side, that demand could see rural property prices rise to dizzying heights.
Either way, if there’s anything we can learn from the last year, it’s that we can never predict what’s around the corner. And while predictions based on past data can help us make logical assumptions, nothing is set in stone.
Is it worth buying now?
If you’ve been saving hard and are considering buying your first home, why not take a look at the various government incentives for first-time buyers, including the Help to Buy scheme which has just been extended.
But remember, buying a home is a huge commitment and one that you should be able to comfortably afford. Missing mortgage payments can mean your home is repossessed. Not only can that be distressing and difficult, but it can also lead to all sorts of problems securing credit in the future.