Good news – house prices are going up! But don’t expect another property price explosion…

For years, buying a house felt like watching your money grow on trees. Prices were shooting up! But lately, things have been a bit more, well, normal.

After a bit of a dip last year, experts reckon house prices are back on the up. But hold your horses! This isn’t another property gold rush. Think steady growth, not overnight riches, an article in The Telegraph claims.

Here’s the summary:

• Property portal Zoopla reckons prices will be up 2% by the end of this year.
• Looking ahead to 2025, experts at Capital Economics predict a 5% jump.
• And looking even further ahead, Savills thinks we could see yearly rises of up to 5% until 2028.

If they’re right, that means the average house price could climb from around £280,000 now to a whopping £340,600 in five years!

Remember those crazy price hikes?

Between 2002 and 2005, house prices went through the roof – we’re talking a massive 28% jump each year on average! Then, during the pandemic, things went bonkers again, with prices rocketing by almost 14% in a single year.

So, what was behind all that?

Well, back in the early 2000s, houses were much cheaper compared to what people earned, plus it was easier to get a mortgage. Then, when the pandemic hit, low interest rates meant people could borrow more, and everyone suddenly wanted a bigger home with a garden.

Why things are different now:

• Interest rates are still higher than they used to be. The Bank of England has been steadily increasing the base rate, which means mortgages cost more.
• Getting a mortgage is tougher. Lenders are being more careful about who they lend to, especially with the cost of living going up.
• Houses are expensive! The average first-time buyer now needs a £53,414 deposit – that’s a huge jump from 10 years ago!

Where will house prices rise the most?

Experts think Scotland, the North of England, and the Midlands are your best bets if you want to see bigger increases. Why? Because houses in those areas are still relatively affordable.

Top tip: Aberdeen is the cheapest city for first-time buyers right now, with an average price tag of just over £102,000. Bradford, Sunderland, Carlisle, and Preston are also worth a look.

The bottom line?

The days of getting rich quick from property are probably over. But if you’re looking for a steady investment, buying a house still stacks up. Just remember to do your research and be prepared to play the long game.