Average property prices in the UK are expected to double over the next 15 years, while the number of homes valued over £1 million is also set to soar, new figures show.
According to Santander, UK property prices will increase 23% by 2020 to £349,300. By 2030, the average UK property price will have almost doubled (+97%), surpassing the half million pound mark at £557,444.
The number of UK properties worth at least £1 million is expected to more than triple between now and 2030.
Miguel Sard, managing director of mortgages for Santander UK, said: “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.”
The report found that over the next 15 years, a quarter of all homes in London are expected to be worth more than £1 million.
In the South East, 7% of homes are expected to fetch more than £1 million.
However, less than 1% in the North East, Yorkshire and Humber, North West, Scotland and the East Midlands are expected to do the same.
The report suggests that incomes will not keep pace with the rise in property prices, 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.
This trend is elevated in London, where prices are currently 11.5 times incomes and predicted to rise to a staggering 16.5 times the average salary by 2030.
Paul Cheshire, LSE professor of economic geography and author of the report, said: “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.
“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.”
