New research from the London School of Economics and Santander predicts that house prices will continue to rise between now and 2030. Currently the average price for a home in the UK is £283,565. According to the data this will rise in the next 15 years, ultimately reaching £557,444.
The same research predicts a huge rise in the value of properties in London over the period. Currently a little over 300,000 homes in the capital are valued at £1 million and over. By 2030 this number is expected to more than treble, rising to almost 25% of all homes.
Property price inflation will continue to make people into million pound property owners. The largest concentration of these will be in London but they will not be restricted solely to the capital. In fact, the report claims there will only be one place in the whole of the UK where there will be no homes worth £1 million and more in 2030; Torfaen in Wales.
The report used data from a number of sources including the Office of National Statistics (ONS), the Land Registry and the Office for Budget Responsibility (OBR). The findings make good reading for property owners, showing that the value of their assets could rise a great deal in the coming years.
The research also looked at the drivers that had and would continue to cause house prices to rise at such a high rate. The two main reasons are rising incomes and inelasticity on the supply side. The first cause means that there are more people getting into a position where they want to purchase. The second results in rises because of the resulting high demand for the properties that are available.
Typically, international buyers and population growth are thought to be additional drivers behind the increase in property prices. Although these do have an impact, the report claims they have had less of an influence than higher incomes and inelastic supply.
Prospective buyers should look carefully at the homes they are currently considering and think about how much the value could increase over the next 15 years. To maximise their investment they should be searching for areas that will prove to be popular in the future. These will provide the best potential for big returns. At Finefair, we specialise in property investments and guaranteed rent in Harrow and throughout the rest of London, and can help to optimise your chances of making a successful investment. Just get in touch if you would like further information about what we can do for you.