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Major lender says house prices have risen by high double digits in last three years

Journalist: Jane Matthews, FTAdviser

ended 28. February 2023

Hi Newspagers, 

We have had some data in from a major lender saying house prices have risen by double-digits (circa 20%) over the past three years compared to single-digit growth in the previous three years - I can't be more specifc at this stage but obviously this is quite significant growth and we would love to hear your thoughts on it. 

One standout from the research was that five UK regions have seen the average price of detached houses jump by more than £100,000 since the start of the pandemic.

Couple of questions based on this:

What do you think of this growth? 

How has it impacted clients to date? 

And do you think growth will level out back to below 10% over the next three years?

Many thanks, 
Jane

3 responses from the Newspage community

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Graham CoxVerified
Director at Bridging Hub
The huge house price growth since the pandemic began is an anomaly, and indicative of a housing bubble. Property values were pump-primed higher by near-zero interest rates and Rishi Sunak's stamp duty holiday folly. It lured the unwary, particularly first-time buyers, into purchasing property at over-inflated values by borrowing up to the hilt. It's unsustainable and a disaster waiting to happen. I think property prices will fall back to earth by 25∞-30% over the next couple of years and only start plateauing in 2025. This will be a long overdue crash that will benefit not just first-time buyers but most homeowners too in the long run.
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Gary BoakesVerified
Director at Verve Financial
I personally bought at £370,000 4 years ago and sold a month ago at £485,000. The property we are buying was bought 2 years ago at £365,000, and we paid £477000. These are massive increases in such a short period of time and luckily we have benefited from the growth and increase. However, if I were a first-time buyer, that £112,000 increase in 2 years is an income increase of £24888. That is huge and not a surprise average income to average house price peaked at 7.1X income last year.
In the long term, these house price increases are not going to be sustainable until salaries start to catch up, which is why we are going to see house prices decline or plateau in the short term.
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Jamie LennoxVerified
Director at Dimora Mortgages
These numbers come as no surprise with the race for more space during the pandemic. That combined with the stamp duty holiday and families having more surplus income due to lack of ability to travel and socialise heightened demand further, pushing up prices. With the cost of living crisis and more people being called back to the office, we could see this tip the other way with a rush of people selling up once their fixed deal expires.