UK house prices will drop by 6% over next 10 years, study finds
Residential property prices in England and Wales are set to fall by 6.5% over the next decade, according to a new study by the housing charity Shelter.
The charity said that the figures showed the national housing crisis was not going away and that some properties could end up on the market for as little as £2,500 a year.
The Shelter analysis of official data from local authorities across England and the Midlands revealed that the number of homes that could be sold for less than £2.5 million is set to increase by 2.7% over five years.
The report said that a combination of rising house prices and a number of factors including the number and size of new buildings built, could mean that a number could end a house’s selling price before it even reaches the £2 million mark.
The findings were based on data from the Housing Association of England and Scotland, which is the industry body for local authorities, housing associations and developers.
It found that the majority of new homes in England were being built for the first time and would only be built for a further 15 years, with new construction expected to grow by just over a quarter over the same period.
But, it added, the average value of a new home was estimated to be £4,300 a year, and some new homes would be sold at more than £3,000 a year and up to £5,000 in the past.
“In some cases, even when the market is strong, a number can end up selling for more than the market will bear,” said Shelter chief executive Liz Davies.
“This can mean a housing crisis that we need to tackle, not just in England but across the country.”
Shelter, which commissioned the report, said the figures were a reminder of how vulnerable some people’s property could be in times of economic hardship.
“It’s important that housing does not become a financial and social safety net for the people that need it the most,” Ms Davies said.
“That’s why we need clear policy from local government to ensure that new homes are built with the right housing options in mind.”
The report found that, despite the pressures that could force many people out of the housing market, the Government’s housing strategy would do more to help people get onto the housing ladder than any other single strategy in its portfolio.
It also noted that the Government is investing heavily in affordable housing and supporting the construction of more affordable homes.
“We know that if we can build the right affordable housing for people, it will help them get on the housing roll, make a positive contribution to the economy and keep our cities vibrant,” Ms Davis said.