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What will 2020 mean for house prices?

Patrick Kielly
Jan 6, 2020


What will 2020 mean for house prices across the UK?

It's fair to say that 2019 was not the best year for house prices - in fact, they remained about as stagnant as a heavy tractor stuck in thick mud.

 

Going further back, at a national level, the 2010s saw small house price growth in the aftermath of the financial crisis, before a surge in the middle of the decade was followed by a slowdown towards the end.

That easing back was largely shaped by political uncertainty since the European Union referendum result, but as with the growth of earlier years the headline figures masked the fragmentation underneath.

It was London and the South East that saw a strong bounceback from the financial crisis slump and then a slide after the Brexit vote, whereas the Midlands, regional cities and the North didn't get the strong mid-decade rises but continued to do well  until this year.

The Daily Mail has put together some questions for both buyers and owners now are what will the next decade hold - and what do they want? 

House price gains benefit existing owners on paper, but make it harder for them to move up the ladder when the time comes. 

Meanwhile lower house price inflation - or even property prices falling - makes life easier for first-time buyers, but can dent banks and building societies willingness to lend - and existing owners' desire and ability to sell to them.

However, 10 years and ten housing ministers after 2010 ushered in the decade of austerity, house prices are forecast to post modest but not spectacular gains as buyers are held back by high prices but can take advantage of rising wages and rock-bottom mortgage deals. 

Does this mean things are looking up for the next decade? Or will Brexit continue to put the stabilisers on the property market?  

This is Money, alongside experts, takes a look back at how the market has changed over the past ten years and what we can expect in the decade to come. 

Any look at house prices over the past decade must begin with an acknowledgement of how much the capital and commuter belt skewed headline house price figures.

London and the South East pushed headline average price rises up as a mini-boom gripped the market in the early to middle part of the 2010s, before dragging it back down again as the market slumped from mid-2016 onwards.

London saw the highest level of house price growth in the last decade - the average property in the capital rose 72 per cent - more than double the average UK house price growth of 33.7 per cent. 

But the capital has seen a marked slowdown in recent years and in many areas of London house prices have fallen back from their peak.

As measured by the house price indices, the falls are relatively small, but agents suggest homes are selling for 5 to 10 per cent less than in 2015 to 2016.

The average house price has increased by £47,647 - equivalent to 27 per cent - from January 2010 to the end of 2019. 

This is based on data from Halifax, Nationwide Building Society and the Office for National Statistics. 

Nationwide's house price index revealed that, in January 2010, the average house price was £163,481. This was £215,734 by November 2019.

This is a difference of 32 per cent – or £52,253. This is based on its own lending data.

Meanwhile, ONS' UK house price index, previously referred to as the Communities and Local Government index, showed that, in January 2010, the average house price was £207,159.

However, the latest ONS release shows that house prices in October 2019 stood at an average of £233,000 - a difference of £25,841 or 12 per cent. This is based on actual sold prices.

Halifax's index reported that, in January 2010, the average house price was £169,777. 

In November 2019, it said that the average house price was now at £234,625. 

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