Client Money Protection / house price increases since the end of the 2009 recession

House price increases since 2009 recession?

Eight years of quantitative easing (QE) and record low interest rates is estimated to have cost savers more than £160bn, but supported strong house price increases as well as stocks and bonds.

Analysis by online estate agents HouseSimple.com suggests that average UK home prices have increased by more than 40%, which equates to almost £60,000 since 2009, when interest rates were cut to an historic low of just 0.5%.

It is now just over eight years and three months since the day the Bank of England cut interest rates to 0.5% (the rate fell to its existing level of 0.25% in August 2016) and during that time the average price in the UK has increased by 41.2%, led by gains in Cambridge and London where the average property has almost doubled in value.

HouseSimple has analysed how much UK house prices have risen or fallen since March 2009, by looking at average house prices, based in Land Registry data, in 100 UK towns and cities between March 2009 and April 2017.

Overall, the South East has fared particularly well, with seven of the 10 biggest property price rises since March 2009. Cambridge, London and Slough have all seen average house price growth in excess of 90%. However, at the other end of the performance chart, Hartlepool has recorded a 9% drop, Durham a 6.2% fall, while prices in Middlesbrough are down 4.5%, In fact, all regions in the North East have seen prices fall.

The following table shows the UK towns and cities that have seen the biggest rises in average property prices since interest rates fell to 0.5% in March 2009:


Town/City Region Average Property Price – March 2009 (£) Average Property Price – April 2017 (£) % Increase in property price
Cambridge East 224,469 441,527 96.7
London South East 278,186 530,751 90.8
Slough South East 160,774 305,649 90.1
Oxford South East 228,586 415,843 81.9
Watford East 200,219 360,396 80.0
Milton Keynes South East 147,903 262,241 77.3
Hemel Hempstead East 230,686 406,312 76.1
Luton South East 132,001 231,315 75.2
Brighton South East 202,564 353,195 74.4
Crawley South East 158,285 273,517 72.8
Stevenage South East 160,350 276,201 72.2
Guildford South East 261,614 444,232 69.8
Reading South East 177,688 301,443 69.6
Colchester East 149,654 253,618 69.5
Woking South East 244,218 411,303 68.4

The following table shows UK towns and cities that have seen the worst property price growth since interest rates fell to 0.5% in March 2009:


Town/City Region Average Property Price – March 2009 (£) Average Property Price – April 2017 (£) % Increase/ (decrease)  in property price
Hartlepool North East 110,231 100,291 -9.0
Durham North East 102,003 95,638 -6.2
Middlesbrough North East 118,605 113,285 -4.5
Blackburn North West 104,105 103,075 -1.0
Preston North West 111,264 111,414 0.1
Swansea Wales 100,676 102,243 1.6
Rochdale North West 120,616 124,191 3.0
St Helens North West 129,556 137,840 6.4
Southport North West 110,562 118,552 7.2
Wakefield West Yorkshire 110,687 118,904 7.4
Carlisle North West 142,122 152,719 7.5
Gateshead North East 126,419 135,998 7.6
Barnsley South Yorkshire 104,029 113,419 9.0
Doncaster South Yorkshire 109,427 120,098 9.8
Glasgow Scotland 104,902 115,180 9.8

London

Across the capital, average home price growth has been particularly strong during this unprecedented time of record low interest rates, with prices rising on average 90.8%. The borough of Kensington and Chelsea tops the chart, with average prices increasing by 128.9%, while the less glamorous boroughs of Haringey and Waltham Forest have witnessed impressive price growth since March 2009, with price growth of 111.7% and 106.4% respectively.

The following table shows the London boroughs that have seen the biggest rises in average property prices since interest rates fell to historic low of 0.5% in March 2009:


Average Property Price – April 2017 (£)
London Borough Average Property Price – March 2009 (£)/th_column] % Increase in property price
Kensington and Chelsea 598,430 1,369,708 128.9
Haringey 263,609 558,003 558,003
Waltham Forest 203,666 420,348 106.4
City of Westminster 502,387 1,033,617 105.7
Lambeth 255,001 521,198 104.4

The following table shows the London boroughs that have seen the lowest rises in average property prices since interest rates fell to historic low of 0.5% in March 2009:


Average Property Price – April 2017 (£)
London Borough Average Property Price – March 2009 (£)/th_column] % Increase in property price
Havering 207,166 358,251 72.9
Camden 465,563 814,188 74.9
Tower Hamlets 264,712 470,021 77.6
Bexley 187,076 334,191 78.6
Bromley 245,444 439,112 78.9

Alex Gosling, CEO of online estate agents HouseSimple.com, said: “While UK savers have suffered over the past eight years, millions of homeowners have increased their equity in their homes substantially in this once-in-a-generation low interest rate environment. It’s been a golden period for UK homeowners, but there are signs that it could be coming to an end as the MPC narrowly voted to hold interest rates at 0.25%.

“House prices are also under pressure from the political and economic uncertainty of Brexit and the fallout from the disastrous General Election result for the Conservative Party. There is no evidence to suggest that property prices are about to plummet, but homeowners and home buyers do need to plan ahead, and make sure they can cover the impact of interest rate rises on their monthly mortgage payments.

“Many homeowners will have never seen an interest rate rise, and may believe rates will never rise. But they will eventually, and when they do, we could see rates rise by 1%-2% quite quickly. With many households already feeling the strain of higher day-to-day costs, monthly mortgage payments going up by several hundred pounds a month could tip them over the edge.”

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