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Number of million pound properties in UK expected to triple by 2030
The number of million pound properties in the UK will more than triple by 2030 and one in four London homes will cost £1 million or more by 2030, new research shows. Yet less than 1% of properties in the North East, Yorkshire and Humber, the North West, Scotland and the East Midlands will be in this price bracket, according to the study from Santander Mortgages. Also, by 2030 the average property price in the UK expected to double, surpassing the half a million pound mark with prices set to soar to as much as 16.5 times average incomes. Today, less than half a million homes in the UK are valued at £1 million or more, says the research done partnership with economist and London School of Economics professor of economic geography Paul Cheshire. It says that 25% of housing stock in London is expected to be valued at £1 million or more, rising to 70% in two London boroughs, highlighting a stark geographical divide. Overall, the average UK property price, which currently stands at £283,565 is expected to increase 23% by 2020 to £349,3000. Fifteen years from now in 2030, the average UK property price will have almost doubled with a 97% increase, surpassing the half a million pound mark at £557,444. While property prices are expected to soar, predictions suggest that incomes will not keep pace, resulting in an overall decline in affordability. At present in the UK, the average property price is 7.9 times the average income, but by 2030, this is expected to hit a multiple of 9.7. Again, this trend is elevated in London, where prices are currently 11.5 times incomes and predicted to rise to an eye-watering 16.5 by 2030. ‘Property price inflation will tip many existing home owners into the million pound price bracket but could also price some aspiring buyers out of the market if they don’t have the right support. The current property market is buoyant and the deals available to new and existing owners are extremely competitive, so those wishing to buy or move shouldn’t be put off,’ said Miguel Sard, managing director of mortgages, Santander UK. ‘Regardless of the price point a buyer is considering, our advice remains the same; do your research, find a mortgage provider that offers competitive rates and a range of products to ensure that the right deal is secured, and above all, ensure the repayments are affordable,’ he added. Cheshire pointed out that by 2030 the divide between housing haves at the top and the have nots at the bottom will be even wider than it is now. ‘More owners will enjoy millionaire status, as homes that many would consider modest fetch seven figure prices in the most sought after areas,’ he said. ‘Property price inflation is beneficial for existing owners who will see their net-wealth increase, but it will make entering the market more difficult still for new buyers, further highlighting the importance of… Continue reading
UK house prices dipped slightly in December, say latest ONS figures
UK house prices increased by 6.7% in the year to December 2015, down from 7.7% in the year to November 2015, according to the latest figures from the Office of National Statistics (ONS). Prices were up year on year by 7.3% in England, by 1% in Wales, and by 1.5% in Northern Ireland but fell by 0.2% in Scotland. The annual growth in England were driven by an annual increase in the East of 9.7%, in London by 9.4% and in the South East by 8.8%. Excluding London and the South East, UK house prices increased by 5.1% in the 12 months to December 2015 but on a seasonally adjusted basis, average house prices decreased by 0.2% between November 2015 and December 2015. The data also shows that in December 2015 prices paid by first time buyers were 6.4% higher on average than in December 2014 while for owner occupiers (existing owners), prices increased by 6.9% for the same period. Average mix-adjusted house prices in December 2015 stood at £301,000 in England, £175,000 in Wales, £193,000 in Scotland and £148,000 in Northern Ireland. According to Peter Rollings, chief executive officer of Marsh & Parsons, existing home owners have every reason to be in high spirits after the tenacious house price growth experienced in 2015 which saw average values break through the £300,000 barrier. He also believes that buyers climbing onto or up the property ladder are hitting the ground running, on the back of favourable mortgage deals and support schemes from the government. ‘In London, we’ve seen new buyer registrations in January increase 24% on last year, which bodes well for purchase activity in the opening months of 2016. Landlords and investors in particular will be in a hurry to secure their preferred property before the additional 3% Stamp Duty becomes liable on second homes in April,’ he said. ‘But with annual house price growth in London just shy of double digits, first time buyers and those trading up also can’t afford to hang about either. The prime central London market has been challenged and unsettled by steeper Stamp Duty, but in lower priced boroughs further out of the centre, high demand and low supply of properties coming up for sale are sustaining strong price rises,’ he added. Adrian Gill, director of Reeds Rains and Your Move estate agents, believes that the property market is developing into the strongest sellers’ market since the recession. ‘December may have weathered the first month on month stumble in house price growth for eight months, but on average, property prices are still increasing at more than twice the pace of earnings, which is certainly jubilant news for existing home owners,’ he said. ‘Potential sellers would be advised to get their property on the market now to take advantage of the spring surge that is already following these figures for December. But rising prices make it tougher for those still hoping to climb onto the… Continue reading
A south facing garden doesn’t push up a property’s price, study shows
Despite estate agents and property experts in the UK espousing the benefits of a south facing garden, this is not reflected in the asking price, new research has found. An analysis of property asking prices reveals homes with south facing gardens carry a mere 0.37% premium compared to properties with north facing gardens. South facing gardens have long been touted as desirable because they typically get the sun for most of the day and are therefore thought to be warmer and brighter, but it appears this isn’t reflected in property prices. River views however do carry a higher cost, averaging 9% compared to identical properties located on the same development without this sought after outlook, according to the study commissioned by Direct Line Home Insurance. In one North London development, a three bedroom property with a river view has an asking price of £850,000, some 42% more than an identically proportioned and designed property elsewhere in the development that costs £600,000. The research also reveals that in many cities if you live higher in a new development, you pay a significant premium for the privilege. One developer informed researchers they added a £15,000 premium to the asking price for every floor, bringing new meaning to the phrase ‘sky high’ prices. An apartment on the fourteenth floor of a new London development five minutes from Angel tube station is on the market for £850,000, which is 31% more expensive than an identical property on the third floor. In a new development near London’s Colindale station a one bedroom flat on the fourth floor costs £438,950 while an identical property on the eighth floor is on the market for £475,000. ‘The research highlights that south facing premiums may well be a myth, but a room with a view comes with a hefty price tag. People are prepared to pay thousands more for the same amenities and layout because a property is located higher in a building, has a more scenic vista, or because it overlooks water,’ said Katie Lomas, head of Direct Line Home Insurance. ‘However, while picturesque river views are much admired it is worth noting properties built near water may cost more to insure because of increased flood risk. Purchasers should check the likely cost of insurance before they commit to buy,’ she added. Continue reading
