Santander research suggests buoyant UK property market

Share on Pinterest
There are no images.

Banking giant Santander has released a research note suggesting that the UK property market will boom over the coming years. This is just the latest in a long line of reports on UK property which all seem to suggest that a lack of new builds and a growing population will push house prices to record levels – way beyond the reach of many first-time buyers. So, what exactly does Santander forecast for the UK property market?

Average property prices

At this moment in time the average property price in the UK is just over £283,000 although this is set to increase to nearly £350,000 by the end of the decade and in excess of £550,000 by the end of the following decade. In reality we need to take such long-term forecasts with a pinch of salt but an average annual rise of 4.5% is not out of the question – even if we take into account the boom and bust years which will no doubt occur over the period.

One of the main problems is that wages are not increasing at the same speed as property prices even today and are unlikely to do so for some time to come. The UK economy, along with the rest of the world, is still struggling to recover fully from the 2008 worldwide downturn brought about by the collapse of the US mortgage market. However, it does prompt the question, if first-time buyers are not able to climb aboard the property ladder then who would be pushing prices to record levels?

Growing number of property millionaires

As you might expect, with a buoyant property market the number of properties worth in excess of £1 million will increase dramatically. At this moment in time there are less than 500,000 properties in this particular class but, if the Santander report is correct, this could increase to over 1.5 million by the year 2030. We can only imagine the size of the UK property market in 2030 if these forecasts are correct!

It is expected that the vast majority of properties worth in excess of £1 million will still be located in London and the south-east of England which fits in with the current profile of the UK property market.

Will the north-south divide grow?

There has always been a significant north-south divide with regards to property prices which is based primarily upon employment opportunities, infrastructure spending and the location of public sector offices. This is likely to continue for the foreseeable future and indeed there is every chance that the divide will grow in years to come.

At this moment in time the Midlands and North of England generally offer a higher rental yield but lower capital growth prospects while London and the South of England offer lower rental yields and a great prospect of capital appreciation. We will need to see a significant increase in infrastructure spending outside of London and the south-east of England for the current property price gap to be even maintained in the years ahead.

Share on Pinterest
There are no images.

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>