Latest: House Price Crash News

Sunday, May 16 2021 Add a News Blog Article

RICS April Report [stronger demand expected for Scotland, N. Ireland & London in 2021]

RICS House Price Survey

Each month RICS report their 'housing market survey', which according to investment bank Goldman Sachs is ''the best short-term lead indicator of house prices and activity'' here are the key takeaways: Demand growth is increasing outstripping supply - 'House price inflation further accelerates, across the UK' - Rental market also shows lack of supply. They go on to report that sales expectations are expected to be significantly stronger in Scotland, Northern Ireland & London than the national average...

Posted by Data Dave @ 01:59 PM 0 Comments

UK Average House Price Data – £250,341

Land Registry HPI Data [Feb 2021]

Headlines for Latest Feb 2021 House Price Data Average UK House Prices £250,341 The annual price change is 8.6% [Feb 2020 - Feb 2021] The monthly price change is 0.0% [flat] [Jan 2021- Feb 2021] The House Price Index Figure now stands at 131.3 https://www.housepricecrash.co.uk/house-prices-uk/

Posted by Data Dave @ 08:58 AM 2 Comments

So we have blown the bubble enough?

Major property fund to unlock investors money

A major £2bn UK commercial property fund that has been suspended since December 2019 - locking in investors' money - will resume trading next month. Note this was suspended before COVID

Posted by Deepak @ 07:24 PM 0 Comments

CPI down from 0.9% to 0.7%

[CPI] Inflation Down To Only 0.7% - is DEFLATION close? Bad for House Prices?

Deflation ebbing ever closer, effect on house prices - time to panic? Stagflation is now a real fear for the UK

Posted by Data Dave @ 12:05 PM 2 Comments

What Happens to House Prices during Recessions?

UK House Prices during Recessions

House prices tracked during the last 4 UK recessions. Results may surprise...

Posted by Old Man George @ 10:10 AM 5 Comments

More Money for Houses

Sunak's budget expected to offer first-time buyers mortgage guarantee

The government have decided to provide incentives to mortgage lenders to offer 95% mortgages for first-time buyers. There don't seem to be many details. I expect the incentive will be UK taxpayers underwriting a share of the loan and hence share of risk if the borrower defaults. at a time of significantly rising national debt, I find this policy questionable.

Posted by Quiet Guy @ 11:24 PM 4 Comments

one in 10 owner-occupiers do not have enough savings to cover even a single month mortgage payments

770,000 households could see their homes repossessed

About 770,000 homeowners are vulnerable to repossession during the pandemic if they have suffered a loss if income, a new report revealed, calling on more government support for those at risk of eviction. Meanwhile, renters may be struggling as well. Last week, a coalition of landlords, housing groups and charities has warned that the government needs to do more to support renters and avoid them "being scarred" by debts, otherwise more will lose their homes in the coming months, with the risk of an increase in homelessness.

Posted by deepak @ 12:31 PM 1 Comments

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UK House Prices Graph

The UK average house price is now £250,341.

The house price index (HPI) is currently 131.3.

UK property prices have risen by 8.6% when compared to the previous year but have fallen 0.0% when compared to the previous month.

Source: Land Registry

uk average house prices graph

UK House Price Index

Source website Period covered Average house price Monthly change (%) Annual change (%) Official releases
LSL Property Services & Acadametrics (England and Wales) Feb 21 £333,331   1.10   8.60 Feb 2021 (PDF)
Halifax House Price Index Apr 21 £258,204   1.40   8.20 April 2021
Office for National Statistics [ONS] Feb 2021 £250,341 0.6 8.6 Feb 2021 (PDF)
Zoopla / Hometrack – Monthly National Survey Mar 2021 £227,100   0.10 4.0 April 2021
Land Registry Monthly Report Feb 21 £250,341    0.00   8.60 Feb 2021
Nationwide House Price Index Apr 21 £238,831   2.10   5.70 April 2021 (PDF)
Rightmove ‘Asking’ Price Index Apr 21 £327,797   2.10   5.10 April 2021

House Price Index - Greater London

Source website Period covered Average
house price
Monthly
change (%)
Quarterly
change (%)
Annual change
(%)
Archive /Graph Peak average
house price
Change since
peak (%)
Official releases
Land Registry Monthly Report Feb 21 £496,269 1.40 N/A 4.6 Tick £530,409
(Jan 16)
6.43 Feb 2021
Nationwide House Price Index Q1 21 £482,576 N/A 4.8 6.2 Cross Current Quarter (Q1 2021) March 21
Rightmove ‘Asking’ Price Index Mar 21 £624,975  0.50 N/A 2.20 Tick £649,864
(May 17)
3.82 Feb 2021

House Price Predictions

If you have discovered other or revised predictions that you’d like added to this list then send an email to us with all the information for each column and also a link to a website that contains the information so that we can verify the data.

This table is now sorted by the date that the prediction was made.

Source website Analyst Photo Date prediction made Amount predicted Region Time Period Evidence Notes
www.cebr.com C.E.B.R Photo of David Orr 2020   13.8% UK 2021 Tick
”CEBR predicts that average house prices will be 13.8% lower in 2021 than in 2020.”

 

uk house price prediction

The outlook at the start of 2021 in terms of restrictions imposed by Covid-19, seems similar to that of March and April of 2020. After further easing of restrictions in 2021 we could therefore see what was experienced after the March lockdown ended in 2020 i.e. a surge in house prices. This was caused primarily by buyers scrambling for more space, both house and garden. 

Flats and maisonettes could stand to make the smallest gains in 2021 whilst larger, detached properties with bigger gardens could again stand to see the most gain.

 

The data also shows that for 10 years average house prices in the UK were above the long term trend line but to date have spent a further 10+ years below it.

 

The data shown in the graph after Q4 2020 has been ‘forecast’ by continuing long term trends and further price rises. It shows UK average property prices could reach £275,000 by the end of 2022, nearly a 15% rise.

UK House Prices to Earnings Ratio

This is calculated by dividing the house price for a region by its earnings. That ratio then serves as an indicator of relative affordability. 

 

A higher ratio indicates on average that it is less affordable for people to purchase a house in their region. On the flip side a lower ratio indicates higher affordability in that region. 

 

Whether something is ‘expensive’ can be very subjective and affordability then plays a key part. Bear in mind, ‘expensive’ to one person might not be expensive to another, so that’s why it’s important to break the earnings ratio down by geographical region. It also highlights regional purchasing power. 

 
uk house price to earnings ratio

The chart shows the average multiple of a person’s non taxed pay that’s required to purchase a property, in that particular region. For instance earning £25,000 per annum where a property costs £150,000 would give an earnings ratio of 6. The UK average is 6.2 as shown on the far right.

 

London has the highest multiple at 10.6 and the lowest region is the North of England at 4.2 closely followed by Scotland at 4.4.

 

By comparison over 20 years, from Q4 2000, this ratio has increased dramatically. This means house prices have risen faster than wages have increased, making property across the UK on average more expensive, relative to what people earn.

Have High UK House Prices Put Buyers Off?

The number of sold properties is down on previous years as shown in the chart but this could be a direct cause of the pandemic. However with interest rates being so low, [the Bank of England base rate is just 0.10%], this means that the cost of servicing a mortgage has actually been downtrending over recent years and is now about bang on the historical average.

uk property sales volume
average house prices for first time buyers

Are First Time Buyers Priced Out?

Of course for first time buyers there is the issue of saving for a deposit. This however isn’t always saved from earnings. Bank of Mum and Dad plays a huge part as 40% of people in 2018-19 received help with a deposit. 

This should actually come as no surprise, being that a 20% deposit is 104% of a first time buyers annual income. 

First time buyers have a below average ‘earnings to property prices ratio’ of 5.2 and  purchase less expensive properties than former owner occupiers. [data for England only]

In short, property has become more expensive relative to earnings over the last 20 years making it harder for people, who need to save for a deposit, to get on the property ladder. Once on the ladder though, the costs of a mortgage are at the historical average mark, meaning property ownership isn’t any more expensive than in previous years. 

This could be taken as a clear indicator that the property market is not overheated.

Home ownership rates are at a 3 year high but still down on 2003 highs of 70.3% meaning there could be room for movement.

Prices increased 7.3% last year but are still down on 2007 highs meaning further growth could be possible plus property prices still remain well below the long term trend.

Interest rates are at a historic low meaning the cost of servicing a mortgage is ‘cheap’ and mortgage approvals are up, which is a good indicator of forward-looking demand. 

 

Give us your thoughts? Can you see further house price growth this year or is a looming house price crash on the horizon?