2010s ‘weakest decade for house price growth since 1990s’

January 7, 2020 11:41:45 AM

House prices increased more than five times as fast in the 1980s as they have done over the past decade, analysis has found.

Across the UK, property values increased by a third (33%) across the whole of the 2010s, Nationwide Building Society said.

During the 1980s, they surged by 180%.

The Society’s latest house price index released last week showed the average property value in December stood at £215,282.

Despite the slower pace of growth in property values seen more recently, house prices have still risen faster than incomes over the past decade, with the latter seeing an uplift of around 20%.

First-time buyers in particular may find stretching their incomes far enough to get on the housing ladder a major barrier.

By the end of 2019, earnings equated to around five times house prices for the typical first-time buyer – close to 2007’s record high ratio of 5.4 – and up from 4.4 at the end of 2009.

Low mortgage rates have helped to keep people’s monthly mortgage repayments relatively affordable, however.

House prices
Prices still rose by 33% over the decade (Victoria Jones/PA)

Average interest rates for new mortgages have fallen from around 5% in 2009 to 2.4% currently, the report said.

The 2010s was the weakest decade for house price growth since the 1990s, which saw 21% growth. In the 2000s, house prices increased by 117% across the UK.

Andrew Harvey, Nationwide’s senior economist, said: “The 2010s has been the weakest decade for house price growth since the 1990s; nevertheless, prices still rose by 33% over the decade, somewhat above the 20% rise in average incomes over the same period.

“Despite recent weakness, London has been the top performing region over the last decade, with house prices rising twice as fast as the UK average (at 66%).

“The neighbouring Outer Metropolitan region (which includes places such as Slough, Guildford, Crawley and Chelmsford) also significantly outperformed, with prices rising 54% during the 2010s.”

At the other end of the spectrum, house prices in Northern Ireland have increased by just 2% over the past decade.

Mr Harvey said: “The northern regions, in particular the North, Yorkshire and Humberside and North West, saw relatively weak house price growth over the decade, with prices slow to recover following the financial crisis.

“House price growth has remained subdued in Scotland, with just an 8% rise over the past 10 years.

“Northern Ireland saw the lowest growth, with prices up 2% compared with the end of 2009.”

Here are the house price increases across the 1980s, 1990s, 2000s and 2010s by nation and region, according to Nationwide Building Society: 

– London, 215%, 40%, 111%, 66%

– Outer Metropolitan (includes central/west Kent, north/east/west Surrey, Hertfordshire, south Buckinghamshire and Chilterns and south Essex), 222%, 29%, 95%, 54%

– Outer South East (includes Brighton and Hove, central Bedfordshire, Oxfordshire, Portsmouth and Southampton) 219%, 18%, 114%, 43%

– East Anglia, 227%, 6%, 115%, 43%

– South West, 206%, 19%, 122%, 38%

– East Midlands, 244%, 3%, 120%, 36%

– West Midlands, 196%, 16%, 108%, 33%

– Wales, 163%, 7%, 135%, 17%

– North West, 183%, 23%, 124%, 17%

– Yorkshire and Humberside, 203%, minus 9%, 137%, 17%

– North East, 178%, 9%, 127%, 11%

– Scotland, 125%, 28%, 127%, 8%

– Northern Ireland, 23%, 115%, 123%, 2%

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