Anyone who bought their home ten years ago will have seen the value of their investment nearly double, Britain’s biggest mortgage lender, the Halifax, claims.
At the end of 2000, the average UK property price was £86,310. It now stands at £164,310, a rise of £78,000 or 91%.
Property experts do not expect house prices to increase by the same percentage over the next decade. The Halifax believes that the housing market will enter a period of stability and only modest gains.
Home owners in the North have seen the largest increases with the average price of a home now 102% higher than it was 10 years ago. In the South of England, house prices have increased by 75%. The North / South divide has closed from 80% to 56% over the past decade with the average price of a home in the South now standing at £206,091, £73,928 more expensive than in the North.
However, this trend might be reversing. Prices in the South have been rising over the last five years while in some areas of the North; prices have dropped by up to 10%.
Only 24% of British consumers expect house prices to rise this year, whilst 32% expect them to fall, according to a new survey by Rightmove. Mortgage lending companies are expected to curtail lending and consumers will suffer financially from the government’s spending cuts.
Adam Posen, one of the Bank of England’s policy makers said last week that the lack of finance for first-time buyers could cause a downturn in the housing market. Contractor mortgage approvals in December dropped to their lowest level in nearly 2 years, the Bank of England said earlier this month.
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