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Priced out: One in 28 homes in Bristol will be worth more than £1 million by 2030


03-14-2016

 

By S_Prideaux  

One in 28 homes in Bristol will be worth more than £1 million

Economists are warning that home buyers will need to make more and more compromises in the future if they want to secure a home within their budget, such as enduring a longer commute to work or moving further away from their chosen area.

It also says the gap between home owners and renters will widen as the "unthinkable" £1 million price tag increasingly becomes attached to more modest properties.

The average house price in the UK is set to rise from £280,000 to £344,000 within the next five years, and by 2030 that will have doubled to £557,444, according to Santander. Homes in Bristol currently sell for an average of £234,000.

The drop in availability of affordable homes in the UK will mean that by 2030 the average home will be worth almost 10 times the average income, as opposed to 7.9 times, as it currently stands.

Around 6.3 per cent of homes in Bath and North East Somerset, 3 per cent in Gloucestershire, 2.3 per cent in Cornwall, and 4.1 per cent in Kent will be worth £1 million by 2030. The figures have been calculated by looking at current house prices and past patterns.

In London, it is predicted that one in four properties will be worth £1 million, and in areas such as Kensington and Chelsea, that could increase to as many as 70 per cent.

As it currently stands, half a million homes in the UK are valued at £1 million or more - 1.8 per cent of the total housing stock.

The report said: "If house prices rise faster than real incomes – as they persistently have over the past 50 years - then the quality of housing buyers can afford also falls.

"New home owners have to make do with smaller houses in less convenient locations – maybe further from their jobs, friends, and family and a good local school, meaning the need to compromise increases."

Paul Cheshire, LSE professor of economic geography and the author of the report, said: "By 2030 the divide between housing haves at the top and the have nots at the bottom will be even wider than it is now.

"More owners will enjoy millionaire status, as homes that many would consider modest fetch seven figure prices in the most sought-after areas.

"Property price inflation is beneficial for existing owners who will see their net wealth increase, but it will make entering the market more difficult still for new buyers."

Figures show the number of £1 million-plus properties in 2015, followed by the expected number in 2030, and the percentage of £1 million-plus properties as a percentage of total housing stock in 2015, followed by the expected percentage in 2030:

London, 307,433, 947,606, 8.91%, 24.82%

South East, 85,441, 288,157, 2.26%, 6.94%

East of England, 32,734, 122,390, 1.26%, 4.25%

South West, 18,059, 74,407, 0.73%, 2.69%

West Midlands, 12,598, 33,218, 0.52%, 1.28%

North West, 14,122, 32,769, 0.44%, 0.97%

Yorkshire and the Humber, 8,628, 21,207, 0.36%, 0.83%

Scotland, 6,605, 22,621, 0.26%, 0.82%

East Midlands, 5,793, 17,729, 0.29%, 0.80%

Wales, 3,666, 9,032, 0.26%, 0.60%

North East, 3,386, 7,248, 0.28%, 0.57%

Northern Ireland, 1,338, 2,328, 0.17%, 0.28%



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