UK house prices predicted not to reach their 2007 peak until 2019
Gráinne Gilmore, Head of Knight Frank’s UK Residential Research, said transaction levels had roughly halved since the last market peak in 2007, and are 35% below the 20 year average as first-time buyers and those further up the housing ladder struggle with tighter mortgage lending rules.
“Some five years after the start of the financial crisis, the housing sector in the UK still does not bear the hallmarks of a fully functioning market,” she said. “House prices have been flat or modestly declining across the UK since 2010. The fundamentals suggest that a further correction in prices is needed as the relationship between average earnings and average house prices is well above the long-term average. First-time buyers without a 25% deposit find it hard to climb onto the housing ladder at all, although some government initiatives such as Firstbuy and NewBuy have tried to open up the market to those with more modest deposits.
“We do not see average prices reaching their 2007 peak again until 2019, which would mark the longest period between price peaks in more than 60 years. Once inflation is stripped out, average UK house prices are unlikely to hit 2007 levels again in real terms until 2031.”buying house, estate agents, mortgages, moving house, real estate, selling house
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