Using Office for National Statistics (ONS) data from the past 80 years, financial comparison site money.co.uk has predicted that house prices are set to surge by a whopping 100% over a 25-year period.
Considering how our household finances could look in ten years’ time, money.co.uk has analysed personal finance data from the past 80 years to reveal the shocking rate at which we can expect our costs to increase by 2028.
The tool estimates that the number of Britons buying a home in 2028 will drop. Last year, money.co.uk found that 14.6m in the UK owned their own homes. However, in the next ten years, this is set to fall to 14.4m.
With the average cost of buying a home expected to rise by 20% over the next decade, from a typical property value of £208,318 in 2017 to £255,292 in 2028, unachievable deposits could be forcing people to rent privately.
In 2003, the average house price was £127,246, meaning that property values will have experienced a 100% increase in just over 25 years by 2028.
The tool not only found that house prices are set to rise by 20% over the next ten years, but also that the average monthly rent price is due to increase by 10% over the same timeframe, from £925 to £1,017.
Could this smaller rate of growth mean that more people will be geared towards renting, rather than buying their own homes?
Hannah Maundrell, the Editor in Chief of money.co.uk, says:
“The cost of our major life events, like buying a house and getting married, are rising, but wages are not keeping up. More than ever before, people need to make their finances a priority. Our predictions can give people a good indication of how much these life events are going to cost and the amount they need to save for their dream futures. It’s no surprise the UK is adopting a renting culture, as house prices are quickly outstripping what people can realistically afford.
“It’s really hard to save a deposit while you rent. If buying a property is on your bucket list, you need to seriously work out how you are going to achieve it. Getting a handle on your outgoings and incomings is the first step to budgeting for your life. It sounds daunting to budget for life events that feel so far away. However, with prices evidently on the rise, it will take you far longer to save up to achieve your life goals.”
She adds: “The figures we’ve predicted are based on trends in Government data. We expect certain external events may have a large impact on future finances, such as large political milestones like Brexit or wage freezes in the public sector.”