Monday, November 29, 2021
Real EstateUK

Average house price set to exceed £370k in next five years

Average house price

In addition to sharp increases, research suggests that the north-south divide in property prices will also shrink over the next five years

Property group Savills predicts that average house prices across Britain are set to exceed £370,000, with some properties rising by more than £40,000, in the next five years.

In addition to sharp increases, research suggests that the north-south divide in property prices will also shrink over the next five years, with high prices in the south being subject to affordability initiatives, to ensure that people aren’t priced out of certain areas. London is however still expected to come top, as the area with the highest average house prices in 2026.

Lucian Cook, head of residential research at Savills, commented on the predictions: With the prospect of inflationary pressures persisting into next year, bringing forward the first anticipated interest-rate rise, we expect price growth in the near term to be somewhat more muted than we have seen of late.

He also said that with gradual interest-rate rises expected, Savills expect the mortgage regulation introduced back in 2014 to show its hand more clearly over the next five years and that stress testing of affordability has meant that existing borrowers are unlikely to get into financial trouble as rates creep up.

But, said Cook, it will cap how much new buyers can borrow relative to their income in a higher interest-rate environment, acting as a drag on both prospective price growth and market activity over our forecast period.

Lawrence Bowles, director of residential research at Savills, commented on the closing of regional differences indicated by the predictions: Given where we are in the housing market cycle, the north-south divide in house prices looks set to close further over the next five years. There remains more of an affordability cushion beyond London and the south. The Government’s levelling up agenda has the potential to accelerate a rebalancing of the market, but only if it gains meaningful traction.

Important:

The articles are for information purposes only and Invest for Property shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Invest for Property does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply

18 − eight =