The most valuable asset most of us will ever own, properties are often considered one of the best investments we can make – provided the prices increase, of course.
With COVID-19, Brexit and the imminent end of the stamp duty holiday looming over us, it’s easy to be concerned about average house prices, but it’s important to remember that this is just a small part in what is an extremely long-term process.
With that in mind, we decided to take a look at the increase in average house prices across the UK over the last 40 years, and use that data to predict average property prices up until 2050.
What causes house prices to rise?
While there are things that homeowners can do to increase the value of their own home, such as decorating the interior, tidying up the exterior, or adding an extension; there are factors beyond our control that can impact house prices across the country as a whole.
Concerned about the impact of COVID, the end of the stamp duty holiday and Brexit on your house? Don’t be: whilst RightMove’s house price index has indicated that the average costs have decreased by 0.9% in January 2021, there’s hope sales will increase before the end of the stamp duty holiday.
Additionally, research by Which? indicates that Brexit is unlikely to affect the UK’s average house prices.
Instead, it’s the longer-term trends that will have a bigger impact. According to the Bank of England, if the economy is thriving, more people are in employment, and the more money banks are willing to lend for mortgages, the higher the average UK house price will be.
Another cause of rising house prices is an increase in demand – which is typically either caused by fewer houses being built, or by an increase in single-person households.
House prices have grown by 1,145% since 1980
It’s crazy to think that back in 1980, the average house sold for just £19,273, compared to £239,927 in 2020 – a staggering 1,145% increase. The biggest five-year increase occurred between 1985 to 1990, where average house prices increased by 109%, reaching £58,250. But what’s really interesting, is that the following five years saw the only dip in average house prices, falling 5% to £55,437 on average in 1995.
Predictions: 2025-2050
With average house prices climbing so drastically over the last 40 years, it left us questioning what the future of house prices will look like. Whilst we can’t predict the figures for certain, we analysed data over the last 40 years to forecast average figures up until 2050.
If average house prices continue to rise as they have been doing, by 2025, the average property will cost £251,476. This figure will then tip over the £300,000 mark in 2035, and increase to £392,301 by 2050 – a huge 64% increase in 30 years!
It’ll be interesting to see over the years if these forecast figures do turn into reality; but it will largely depend on factors such as the economy and supply and demand for housing. Nevertheless, getting onto the property ladder as a first-time buyer is extremely rewarding – as is selling your house for an increased value, enabling you to start an adventure in a new house.
If you’re in the process of putting your house on the market and want it to sell fast, then get in touch with us today, as we can help.
Methodology
We sourced average house price data from 1980-2015 from Land Registry, and used The Guardian/Halifax for 2020 data.
To predict average house prices from 2025-2050, we took the current data we had, and used the linear forecast function in Microsoft Excel.
FAQs
It pays, then, to keep an eye on how much the property is likely to increase in value over the years. Latest forecasts show that the average price of a home in the UK will be £335,971 in 2040 and £392,301 by 2050, an increase of 64 per cent on the current figure.
How much did a house cost in 1980 in the UK? ›
How much has the average house price increase over the last 20 years in the UK? ›
UK house prices have more than trebled since the start of the 21st century. Analysis by the Halifax has revealed that the average price of a home has risen by an incredible 207 percent in the last 20 years. In Greater London, the rise has been even more steep, up by 239 percent since the millennium.
What will houses be worth in 2030 in the UK? ›
Of course, the capital took the top spot in terms of the highest value, with the average London house setting you back over £1m in 2030. By 2030, the average house price across England could be as much as £457,433, close to the current asking price in the capital.
How much will a house cost in 2040 UK? ›
-Real median house prices for owners will increase to £263,000, a rise of 57 per cent. 35.3 million people will be home owners by 2040 (a reduction of 820,000 people from 2008). -Real household incomes will grow from £32,300 to £45,500.
How much will a loaf of bread cost in 2050? ›
Bread Price Prediction for 2050
In 2050, according to our technical analysis, Bread's projected minimum and maximum prices are approximately $0.05064 and $1.25, respectively. The anticipated average trading cost stands at about $0.7518.
Was it easier to buy a house in the 80s UK? ›
There were no complex mortgage options, and buyers typically had to save up a deposit before approaching a lender for a mortgage. The interest rates were much higher than they are today, and it was not uncommon to see mortgage rates of 10% or higher.
What was the average wage in 1980 in the UK? ›
1980 Average Salary: £6,000 Average House Price: £22,676 2023 Average Salary: £29,600 Average House Price: £288,000 So house prices have gone up by 1170% yet wages have only risen by 393%? For a final figure, to have the same level of income as the average person in 1980 you would need to earn... £76,210 a year.
How much was rent in London 1980? ›
The average rent in Greater London in April 1980 was £10.17. By April 1981 it had risen to £13.05.
What was the average salary in 1990 in the UK? ›
In cash terms, in 1990, the average household would therefore have had a disposable household income of £12,353, at a time when the average house cost about £57,726. By comparison, in 2020, the average household income was £37,108 and the average house price was about £234,947.
Shortage: High Demand, Low Supply
The primary driver of housing price rises is the high demand of renters and the consistently low supply of housing. As it turns out, it's easier to make a baby than build a house, and the economic impact of that is showing up.
What is the price prediction for London houses for next 5 years? ›
Contacts & Related Articles
| 2024 | 5 years to 2028 |
|---|
| South West | 1.0% | 18.7% |
| South East | 1.5% | 18.2% |
| East of England | 1.0% | 18.1% |
| London | 2.0% | 14.2% |
8 more rowsAverage small central London flat to cost £36m by 2050, investor predicts | Housing market | The Guardian.
What is the lifespan of a house in the UK? ›
In accordance with current building regulations, every new home must be constructed to last a minimum of 60 years. Wee Houses are built to dwelling standard and are therefore subject to this strict building criteria. Wee Houses are well designed, high quality timber framed homes.
Are houses still a good investment UK? ›
When considering investments in the UK in 2024, property stands out as a compelling option for long-term growth and financial stability. Property investment offers various advantages, including potential capital gains and the ability to leverage tax benefits. One significant factor to consider is capital gains tax.
What is the future house price prediction for the UK? ›
The Office for Budget Responsibility (OBR) originally forecast prices to fall by almost five per cent in 2024. However, it has recently revised that forecast to a fall of two per cent. It then expects house prices to rebound with two per cent growth in 2026 and 3.5 per cent growth in both 2027 and 2028.
How much will the house price be in the UK in 2027? ›
The estate agent said the market was past 'peak pain' and that house prices had held up held up slightly better than expected in 2023. In 2025, it claimed that average property prices look set to rise by 3.5 per cent to £255,593, before climbing by 5 per cent in 2026 and 6.5 per cent in 2027.
Will houses get cheaper in UK? ›
House price predictions
Estate agent Savills predicts that UK property prices will fall by 3% in 2024, before recovering in 2025 and rising by 3.5% Lloyds Bank has forecast a further 2.4% decrease in house prices over 2024. It expects prices to then recover slightly in 2025.
Will house prices go up in 2025 UK? ›
UK House Prices in 2025 will continue to fall
This would be a total drop of 11% from their peak last year, before beginning to recover. In 2025, Lloyds expect house prices to rise by 2.3%, while fellow lender Santander has predicted a rise of just 2%.
