The average UK house price has soared to a staggering £100,000, showing a ten-fold increase since 1973. The latest figures from Halifax also show the hefty price tag does not always guarantee you a family home, with £100,000 only stretching to an average one-bed flat in London.
Martin Ellis, group economist at Halifax, said: ‘The UK housing market has reached another historic milestone, albeit one that is not shared by all the regions. £100,000 will buy you a wide spread of properties depending on where you want to live and work.’
Alex Bannister, group economist at Nationwide, believes the housing market will remain steady throughout 2002 and said there is no risk of negative equity.
‘To have negative equity, house prices need to be falling on a sustained basis and by a large amount. They need to drop by at least 5% and I expect prices to increase by 6% in the coming year. Although the housing market is becoming highly valued, it is still not as overheated as it was the 1980s. The sharp interest rate increases burst the bubble so we can expect to see a smoother pattern over the coming year.’
Bannister believes the market will remain steady due to strong salaries and low mortgage rates which offset fears of increased job uncertainty.
However, he said: ‘The number of house sales was 12% up in the year to December and this strength is likely to persist in the short run.’