The number of million pound properties in the UK will more than triple by 2030 and one in four London homes will cost £1 million or more by 2030, new research shows.
Yet less than 1% of properties in the North East, Yorkshire and Humber, the North West, Scotland and the East Midlands will be in this price bracket, according to the study from Santander Mortgages.
Also, by 2030 the average property price in the UK expected to double, surpassing the half a million pound mark with prices set to soar to as much as 16.5 times average incomes.
Today, less than half a million homes in the UK are valued at £1 million or more, says the research done partnership with economist and London School of Economics professor of economic geography Paul Cheshire.
It says that 25% of housing stock in London is expected to be valued at £1 million or more, rising to 70% in two London boroughs, highlighting a stark geographical divide.
Overall, the average UK property price, which currently stands at £283,565 is expected to increase 23% by 2020 to £349,3000. Fifteen years from now in 2030, the average UK property price will have almost doubled with a 97% increase, surpassing the half a million pound mark at £557,444.
While property prices are expected to soar, predictions suggest that incomes will not keep pace, resulting in an overall decline in affordability. At present in the UK, the average property price is 7.9 times the average income, but by 2030, this is expected to hit a multiple of 9.7. Again, this trend is elevated in London, where prices are currently 11.5 times incomes and predicted to rise to an eye-watering 16.5 by 2030.
‘Property price inflation will tip many existing home owners into the million pound price bracket but could also price some aspiring buyers out of the market if they don’t have the right support. The current property market is buoyant and the deals available to new and existing owners are extremely competitive, so those wishing to buy or move shouldn’t be put off,’ said Miguel Sard, managing director of mortgages, Santander UK.
‘Regardless of the price point a buyer is considering, our advice remains the same; do your research, find a mortgage provider that offers competitive rates and a range of products to ensure that the right deal is secured, and above all, ensure the repayments are affordable,’ he added.
Cheshire pointed out that by 2030 the divide between housing haves at the top and the have nots at the bottom will be even wider than it is now. ‘More owners will enjoy millionaire status, as homes that many would consider modest fetch seven figure prices in the most sought after areas,’ he said.
‘Property price inflation is beneficial for existing owners who will see their net-wealth increase, but it will make entering the market more difficult still for new buyers, further highlighting the importance of the right timing, advice, support and financial planning; and not just having a mum and dad who bought a house but a grandparent too,’ he added.
Source: Property Wire