HomeReal EstateUK Property on Course for Record Affordability

UK Property on Course for Record Affordability

UK housing prices are on track to their longest streak of improved affordability in over two decades, with data from the Nationwide Building Society showing that average house prices for the year fell 1.8% to £257,443. In real terms, when accounting for inflation, property prices in the UK have slumped by 11% since the start of 2023.

While the recent drop in housing prices is but a small dent in the 20% increase since the height of the COVID-19 pandemic, rising wage growth in the UK is helping to make property more affordable. “Households should be in a better place to capitalize on the improvement in affordability, given the fact we expect real incomes to tick up over the next year or so,” Gabriella Dickens, senior UK economist at Pantheon Macroeconomics observed.

Oxford Economics projected a 4% drop in UK house prices over the course of 2024, with most strategists expecting a drop between zero to 2%. Wages are forecasted to rise by 7.1% between the fourth quarter of 2022 and 2023 and 4% over the 12 months leading to the fourth quarter of 2024, according to Bloomberg Economics.

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