Average UK house prices: 1980 – 2050
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.
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.
To predict average house prices from 2025-2050, we took the current data we had, and used the linear forecast function in Microsoft Excel.