The average cost of a North East home is expected to rise to £277,558 by 2030 – almost twice the price of today.
This compares to just £17,966 in 1985 – a jump of 94%.
Research for regional sales and lettings firm KIS shows the price of homes in the region rising by an average of £7660 a year over the next 15 years, with average year-on-year growth of 2.6%.
The research predicts that in five years the cost of an average North East home will be £187,344, 14% higher than today, and that in 10 years it will have risen by 30% to £229,655.
In the same period, researchers predict national prices will rise at a faster rate of 19% to £341,455 (2020) and 35% to £429,259 (2025).
The research also shows how national prices have accelerated away from the North East over the past 10 years, a trend set to continue. In 2005 the price of a North East home was typically 30% cheaper than the national average. Ten years earlier, it was 29% cheaper. The current rate is 42%, and the gap is predicted to rise to 49% over the next 15 years.
Oxford Economics this year predicted that the average cost of a home in London is on course to exceed £1,000,000 by 2030, with house building struggling to keep pace with a rapidly rising population.
Ajay Jagota, founder and Managing Director of KIS, commented:
“If anything, these figures could be a little on the conservative side. Oxford Economics are predicting annual house price growth of roughly 2.6% a year over the next 15 years – but our research showed prices rising by 11% alone last year.
“If they’re accurate though, this could be very good news for the North East. Wages are currently rising at 2.7% a year, so if house prices are rising at a slightly lower rate, that would see North East homes becoming progressively more affordable over the next 15 years.
“What’s really striking is how national prices are accelerating away from us. In 1995, the typical North East home cost £19,000 less than the UK average. Today it costs £115,000 less. By 2030, the gulf will have widened to £260,000.
“By 2030, the average London home will not only set you back over £1,000,000, it’ll cost you over £700,000 more than the average North East one.
“If London wages can’t keep up with that surge, it is more than possible the North East could benefit from a ‘reverse brain drain’, where more and more people and businesses are unable to afford to base themselves in the capital and begin to look towards our region.
“This strengthens the case for increased devolution for the region, especially if it includes greater powers to develop our regional economy and infrastructure and to develop new housing to meet the growing need.”
Source: Property Reporter