UK property prices rise more than 40% in past 8 years

Blog Single

And it's all thanks to a 'once in a generation' record low interest rate environment

20th June 2017 -- UK homeowners have seen the value of their homes increase by more than 40% and almost £60,000 over the past eight years, as they’ve benefitted from a “once-in-a-generation” record low interest rate environment.

According to research carried out by online estate agents HouseSimple.com, average UK property prices have risen 41.2% since the Bank of England dropped interest rates to 0.5% in March 2009, and then dropped them further to 0.25% in August 2016. Average prices in Cambridge have almost doubled since March 2009, while average London prices have broken through the £500,000 ceiling.

But this golden period of house price growth could be drawing to an end. With three members of the Bank of England’s Monetary Policy Committee (MPC) voting for an interest rate rise in June, and inflation steadily rising, we could be close to the first rate rise in almost 100 months.

HouseSimple has analysed how much UK house prices have risen or fallen since March 2009, by looking at average house prices* in 100 UK towns and cities between March 2009 and April 2017. During this period, interest rates remained at 0.5% for over seven years before falling to 0.25% in August 2016, and homeowners across many parts of the country have seen the value of their properties rocket.

The South East has fared particularly well, with seven of the 10 biggest property price rises since March 2009. Cambridge, London and Slough have all seen average house price growth in excess of 90%. However, at the other end of the performance chart, Hartlepool (9% drop), Durham (6.2% drop), Middlesbrough (4.5% drop) - all in the North East - have seen prices fall.

The following table shows the UK towns and cities that have seen the biggest rises in average property prices since interest rates fell to 0.5% in March 2009:

Town/City

Region

  Average Property Price –      March 2009 (£)

Average Property Price –  April 2017 (£)

% Increase in property price

Cambridge

East

224,469

441,527

96.7

London

South East

278,186

530,751

90.8

Slough

South East

160,774

305,649

90.1

Oxford

South East

228,586

415,843

81.9

Watford

East

200,219

360,396

80.0

Milton Keynes

South East

147,903

262,241

77.3

Hemel Hempstead

East

230,686

406,312

76.1

Luton

South East

132,001

231,315

75.2

Brighton

South East

202,564

353,195

74.4

Crawley

South East

158,285

273,517

72.8

Stevenage

South East

160,350

276,201

72.2

Guildford

South East

261,614

444,232

69.8

Reading

South East

177,688

301,443

69.6

Colchester

East

149,654

253,618

69.5

Woking

South East

244,218

411,303

68.4

 

The following table shows UK towns and cities that have seen the worst property price growth since interest rates fell to 0.5% in March 2009:

Town/City

Region

Average Property Price – March 2009 (£)

Average Property Price – April 2017 (£)

% Increase/ (decrease)  in property price

Hartlepool

North East

110,231

100,291

-9.0

Durham

North East

102,003

95,638

-6.2

Middlesbrough

North East

118,605

113,285

-4.5

Blackburn

North West

104,105

103,075

-1.0

Preston

North West

111,264

111,414

0.1

Swansea

Wales

100,676

102,243

1.6

Rochdale

North West

120,616

124,191

3.0

St Helens

North West

129,556

137,840

6.4

Southport

North West

110,562

118,552

7.2

Wakefield

West Yorkshire

110,687

118,904

7.4

Carlisle

North West

142,122

152,719

7.5

Gateshead

North East

126,419

135,998

7.6

Barnsley

South Yorkshire

104,029

113,419

9.0

Doncaster

South Yorkshire

109,427

120,098

9.8

Glasgow

Scotland

104,902

115,180

9.8

London

Across the Capital, average house price growth has been particularly strong during this unprecedented time of record low interest rates, with prices rising on average 90.8%. The borough of Kensington and Chelsea tops the chart, with average prices increasing by 128.9%, while the less glamorous boroughs of Haringey and Waltham Forest have witnessed impressive price growth since March 2009, with price growth of 111.7% and 106.4% respectively.

Surprisingly, the trendy borough of Camden (74.9%) was one of the worst performing boroughs, although average prices have still grown over 30% more than the UK as a whole.

The following table shows the London boroughs that have seen the biggest rises in average property prices since interest rates fell to historic low of 0.5% in March 2009:

London Borough

Average Property Price – March 2009 (£)

Average Property Price – April 2017 (£)

% Increase in property price

Kensington and Chelsea

598,430

1,369,708

128.9

Haringey

263,609

558,003

111.7

Waltham Forest

203,666

420,348

106.4

City of Westminster

502,387

1,033,617

105.7

Lambeth

255,001

521,198

104.4

 

The following table shows the London boroughs that have seen the small rises in average property prices since interest rates fell to historic low of 0.5% in March 2009:

London Borough

Average Property Price – March 2009 (£)

Average Property Price – April 2017 (£)

% Increase in property price

Havering

207,166

358,251

72.9

Camden

465,563

814,188

74.9

Tower Hamlets

264,712

470,021

77.6

Bexley

187,076

334,191

78.6

Bromley

245,444

439,112

78.9

 

Alex Gosling, CEO of online estate agents HouseSimple.com, comments: “While UK savers have suffered over the past eight years, millions of homeowners have increased their equity in their homes substantially in this once-in-a-generation low interest rate environment. It’s been a golden period for UK homeowners, but there are signs that it could be coming to an end as the MPC narrowly voted to hold interest rates at 0.25%.

“House prices are also under pressure from the political and economic uncertainty of Brexit and the fallout from the disastrous General Election result for the Conservative Party. There is no evidence to suggest that property prices are about to plummet, but homeowners and home buyers do need to plan ahead, and make sure they can cover the impact of interest rate rises on their monthly mortgage payments.

“Many homeowners will have never seen an interest rate rise, and may believe rates will never rise. But they will eventually, and when they do, we could see rates rise by 1%-2% quite quickly. With many households already feeling the strain of higher day-to-day costs, monthly mortgage payments going up by several hundred pounds a month could tip them over the edge.”

Share this Post:

More Posts: