Think Property Values are Unaffordable Now? See What they Could be in 2027…

Following years of sky-high house price growth, we may feel that property values are unaffordable now, but if they continue rising at the same rate, imagine what they could be in 20 years’ time…

The latest study from online estate agent highlights the potential struggle faced by the next generation of aspiring homebuyers and investors. If property values continue to grow at the same pace as they have done over the last two decades, it will be all but impossible to buy homes, warns the firm.

The agent has analysed data from the Land Registry over the past two decades to calculate the percentage increases in property values over England and Wales. Applying the same growth to today’s average house price across each region, eMoov has found out what property could cost in ten and 20 years’ time:

By 2027

Over the next ten years, if property values across England were to rise by the 29% recorded since 2007, the average house price would stand at £301,864.

Average property values in London would surge to a whopping £866,716 if they continued to increase at the same pace as they have done over the last ten years (+80%), making it virtually impossible for aspirational buyers to get onto the capital’s housing ladder.

The South East’s average house price today, £313,334, would rise to £445,159 by 2027 if it continued to rise at 42%, while the East of England follows with an average value of £397,335, as a result of a further 43% increase.

Think Property Values are Unaffordable Now? See What they Could be in 2027…There are, however, certain regions of England and Wales that would remain affordable in 2027. Both Wales and the North West could increase gradually over the next ten years, with average prices of £154,072 and £158,131 respectively. Both the East and West Midlands would also stay within reach, with average property values standing around the £200,000 mark (£205,870 and £183,883 correspondingly).

The North East has actually seen house prices drop over the last ten years, therefore, if this pattern continued, the average property value in the region would drop from £126,989 to £121,699 by 2027.

By 2037

In the past 20 years, the average house price in England has soared by 320%. Although it is unlikely that property values will continue to rise at this rate, a further 320% increase would push the average price to a huge £983,826.

In the capital, the average property value in 2037 could be a staggering £2,792,783 if it continues to inflate at the dangerous rate of 480% recorded over the past 20 years.

Typical properties in the South East could cost £1,422,708 in two decades’ time if prices increased by another 354%, while the average value in the East of England would hit £1,311,380 if its 371% rate of growth remained.

As before, house prices in Wales and the North West would still climb gradually, remaining just about affordable for those looking to buy in these regions in 20 years’ time. The average value in Wales would reach £494,731, while the North West’s would stand at £533,010.

The West Midlands would also remain under the £600,000 mark (£560,037), but the East Midlands would see prices tip over this boundary, to £666,178.

Despite property values dropping over the last decade, house prices in the North East have risen in the last 20 years. If they were to continue increasing at the same rate, the average value would stand at £380,753 – by far the most affordable average house price in England and Wales.

The founder and CEO of eMoov, Russell Quirk, comments on the shocking findings: “Despite the usual industry speculation, it’s not likely that we’ll see a bursting of the house price bubble any time soon, but perhaps a slight deflation temporarily. Should this be the case, this research highlights the near impossible task faced by the next generation of aspirational buyers and acts as a warning to the Government, should they fail to address the current lack of property available, which is seeing prices once again reach dangerously inflated levels.

“The property boom in several regions of England has made it increasingly more expensive to get on the ladder, and the figures anticipating the next two decades only further attest to the importance of investing in a home as soon as possible, if the trend in increasing property values is to persist.”

He adds: “It is stomach churning to think that, should prices continue the way they are, they will be just one real area of property affordability left across England and Wales in 20 years’ time, with the average house price in England approaching the £1m mark and three regions tipping beyond this.”

Although the forecast will come as worrying news for any investors thinking of purchasing properties to let over the next decade or so, it is good news for landlords with investments in the areas tipped for rapid growth.

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