A new report from the Nationwide has revealed the harm done to house price growth during the 2010s by a basket of different politically-driven problems including Brexit, increased Stamp Duty and tighter lending rules following the financial crisis.
House prices rose on average by 33% across the UK during the decade, much less than during the 1980s (+180%) and noughties (+117%) but more than during the recessional 1990s (+21%).
And despite recent problems within the capital’s property market, Greater London significantly outperformed the rest of the UK.
Its house prices increased by 66% during the ten years covered by the Nationwide research, while London’s commuter towns saw house prices increase by 54%.
Also, despite talk of a booming property market at the moment outside London and the Home Counties, house price rises were still weakest in the North and Northern Ireland, improving the further south you look, Nationwide’s report shows.
But its Senior Economist Andrew Harvey (left) reveals that, despite slower house price rises, affordability remains a problem.
“House price growth has continued to exceed earnings growth, resulting in a further rise in the house price earnings ratio,” he says.
“At the end of 2019, the First Time Buyer house price to earnings ratio stood at five, close to 2007’s record high of 5.4, and up from 4.4 at the end of 2009.
“The last decade has also seen a significant widening in the gap between the least affordable and most affordable regions.”
Jonathan Samuels, CEO of the property lender, Octane Capital, says: “It’s not often that you celebrate weaker growth figures but the performance of house prices in the 2010s may be an exception to the rule.
“Affordability is still a major hurdle after just 33% growth so if the trajectory of the noughties had continued the market would have been beyond the reach of many more people.
“For the property market, the cooling of price inflation triggered by the decision to leave the EU was arguably a net positive, especially in London and the South East.