A new survey from residential property firm Knight Frank has indicated that UK house prices will enjoy a cumulative rise of almost 20% by 2020.
The Knight Frank survey shows the the average UK homeowner will see their house rise from a current value of £181,619 to a value of £217,943 by 2020. Meanwhile in the capital, the current average house price of £481,820 will rise past the half a million mark to £578,184.
These figures represent a continuity in the trend for high residential property growth, which continues to see price rises far above the rate of inflation within the UK, currently estimated at just 0.1% on the CPI index.
Even though the figures indicate a relatively evenly spread rate of property price growth, the latest property index has predicted large variations dependent upon region. This rate varies from a 9% year on year growth prediction, to a fall of 0.6% in other regions.
Price rises will continue to be driven by Southern regions, mainly London and the South East.
The price rises continue to be regionally driven by London, the South East and the East, with Cambridge currently leading the pack of high growth cities with annual residential property growth of 10.9%. If these regions are removed from the index, then the average percentage price rise of property in the UK drops to 5.2% from 5.7% demonstrating the protraction of the North/South divide.
Other cities are not predicted to receive such residential property growth. In a recent study of 20 cities, Aberdeen was the only city which had house price growth lower than the 2.4% increase in average earnings. Furthermore, other regions are yet to recover from the recession. Properties in Belfast are currently 47.6% of their 2007 peak, followed by Liverpool, where they are 13.2% lower, and Glasgow, where they are 11.2% lower.
The nationwide rises in house prices are a result of demand continually outstripping supply. The property analysts at Hometrack believe that ‘a combination of low mortgage rates, economic growth and rising earnings continue to stimulate demand and put upward pressure on house prices’.