The 2020 boom in house prices has, understandably, dominated the news headlines this year, with record-breaking increases and the resurgence of regional property markets, while the London housing market has remained subdued in the aftermath of the coronavirus pandemic.
But 2020 is just the tip of an iceberg of steady and seemingly ineluctable house price increases throughout the UK over the past 20 years. Will it shock you if we tell you that the average price of a terraced house in the UK has increased by 96 per cent since the year 2000?
Recent research by Ocean Finance (opens in new tab) looks into how much house prices have changed over the past 20 years in 50 UK cities. The results may surprise you if you expected to see London and other cities in the South East occupying the top spots. Of course, London does feature in the top 10, but only at number four: prices in the capital have increased by 116 per cent since 2000, with the average house price now sitting at a dizzying £786,760.
The top spot, however, has been taken by Manchester. House prices in the northern city have increased by an astonishing 143 per cent in the past two decades. Urban regeneration including the expansion of Manchester's commercial centre and the explosion of the rental market in the city have contributed to this massive hike. And although the average house price there is still semi-affordable at £179,537, it is questionable how much more growth the local property market can sustain without the city becoming unaffordable for locals.
The cities that have all seen house price increases of over 100 per cent include Leicester, Southend-on-Sea, Bristol, Kingston Upon Hull, and Cambridge. It is clear that the north-south divide does not apply to house price growth, but is more dependent on other factors such as urban regeneration and the migratory patterns of well-paid professionals.
If the Covid-induced trend of remote working continues and reshapes the way in which professional people balance their working life and their home life, then we likely will see something of a shift in this top ten, with house prices increasing in unexpected places. This will further decrease housing affordability for key workers whose salaries will not catch up with the house price growth, and there will be even more need for government-backed schemes such as the First Homes scheme.