It is said that house prices double every 10 years in the United Kingdom, but to what extent is this actually true? When looking at the average increase over decades it could seem that prices are doubling; however, when looking at year-on-year increases, this is not necessarily true.
The housing market is very volatile and impacted by multiple factors, including the general state of the economy. While certain areas will experience large growth rates, other regions will be largely unaffected in the UK. If you are buying or selling your house, the fluctuating house prices could hugely impact your experience.
The Housing Market in 2022
Generally speaking, house prices seem to be increasing when looking at average sales in the UK. Figures from the HM Land Registry show that when comparing January 2021 with January 2022, there was a 9.6% increase in house prices with the average UK house price increasing by £24,000.
Across the year, average house prices increased across all regions in the UK. England witnessed a 9.4% increase, with the average house price increasing to £292,000. Meanwhile sold houses in Wales, there was a 13.9% increase to £206,000, while in Scotland there was a 10.8% increase to £183,000. Lastly, Northern Ireland has seen a 7.9% increase to £159,000.
However, within those statistics, certain regions show far less growth than others. For example, London, despite being the country’s capital, is the region with the lowest annual growth, at a rate of 2.2%.
Historical House Pricing Data
If you look at past trends dating back to the 1950s, statistics from Nationwide show that the average price of a property in the UK was around £1,500 in 1952. In 2017, this figure was £211,000. To say that house prices are doubling every 10 years, that would mean a growth rate of 7.2%; however, what these figures show is that there has been a growth rate of 7.5% across multiple decades.
Even taking into account the most recent data, if the year-on-year trends between 2021 and 2022 are anything to go by, this would mean more than doubling over the course of a decade. That said, when looking over a longer period of time, it does seem that on average, property prices are more or less doubling every 10 years.
Average Of 10 Years: Not an Exact Science
Property prices are rarely consistent and fluctuate depending on multiple factors. As a result, there will be periods of time during which prices are increasing at a far more rapid rate; similarly, there will be times when prices are decreasing.
There is too much volatility in the housing market to make generalisations about decade-long trends. Even across the course of a year, there is too much fluctuation to make long-term predictions.
Will House Prices Continue to Double Every 10 Years?
Even if there is some indication that house prices increase every decade, it is unlikely that this trend is sustainable. One of the reasons for this is that house prices cannot rise faster than wages; although we are currently in an economy in which interest rates and prices are increasing at a far more rapid rate than wages, this cannot last forever.
Another reason why the housing market is especially volatile currently is the socioeconomic impact both of Brexit and of the coronavirus pandemic. Once this settles, it is likely that the housing market will stabilise once again.
Additionally, there is the issue of supply and demand meaning that the housing market will forever be in flux. Depending on the level of demand for moving house, the housing market will always be in either a buyer’s market or a seller’s market. Until anything drastically changes, for example the housing shortage being addressed, the housing market will continue to be volatile. That being said, the theory that house prices double every 10 years remains untrue, and only time will tell if this continues.
