Brexit versus Recession
High end Estate Agents Knight Frank have produced some interesting statistics looking at how the UK’s property market has changed from a decade ago. From a 2008 gripped by the global financial crisis to a 2018 mired in the political quagmire of Brexit.
During 2008 when the economic crisis and the collapse of financial markets across the globe were really beginning to bite house prices fell by 16%. There was a small bounce back during 2009 and 2010 but the UK housing market didn’t start to gain real momentum until 2013 as economic growth accelerated. Prices are now 14.5% higher than the previous peak of the market in 2007.
In 2008 the average house price was £153,048, in 2018 it had increased to £212,281 an increase of £59,233 (38%).
During 2008 house prices fell by an average of 15.9% whereas in 2018 prices rose by an average of 0.5%.
Annual sales volumes were 916,920 in 2008 and 1,192,280 in 2018.
The number of first-time buyers in 2008 were 180,100, whereas in 2018 there were 339,700.
Despite Government commitments to significantly increase the number of new builds the net additional dwellings built in 2018 (222,190) was fewer than the figure for 2008 (223,530).
In 2018 the average mortgage rate on a 5-year fixed arrangement (with 75% LTV) was 2.02% compared to 5.28% in 2008.
It is difficult to make too much of “snapshot” figures such as the above, but they do indicate the resilience of the market over a medium to long term. Despite the dramatic fall in prices of 16% during 2008 the market had by 2018 recovered by an average of 14.5% from prices before the fall. An investor buying at the end of 2018 would have achieved an average increase of 38% if they had sold in 2018.
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