What does the property market’s #10yearchallenge look like?


You may have seen, followed, or even engaged in, the recent social media trend of the #10yearchallenge. Reflecting on a memory or snapshot from a decade ago versus today. So what does the property market’s #10yearchallenge look like?

The political uncertainty surrounding Brexit has undoubtedly had a significant effect on the property market since the Referendum in 2016, but how does this compare to just over 10 years ago, when the UK property market fell fast and far after a global financial crisis erupted, rippling out from a subprime US mortgage market full of precarious loans.

The average UK house lost 20% of its value in the 16 months up to February 2009, and transaction levels, which had averaged 1.65 million a year in the previous decade, plummeted to just 730,000 in the 12 months to June 2016. In 2008 alone, house prices fell by 15.9%, with the average price sitting at £153,048, according to Nationwide. In 2018, the average price has risen to £227,000 with the annual % change at +3.7% in the year to April 2018 (UK House Price Index). Over the next 6 years to 2025, PwC project that house prices could be 9% more expensive than in 2017.

In 2017 fixed rate mortgages accounted for 94% of new mortgages compared to only around 50% in 2010. It is estimated that only around 28% of UK households now have a mortgage. Combining these factors, research by PwC estimates that only 11% of all UK households would now be immediately affected if mortgage interest rates rose, compared to around 24% in 2012. According to UK Finance, in 2008, mortgage rates for a 5-year fixed deal at 75% LTV was 5.28%. In 2018, for the same deal, the rate sat at 2.02%.

We certainly have come a long way in the past decade. Albeit the future of the housing market is far from clear and we find ourselves in the depths of a buyers’ market, according to latest research by quickmovenow.com, only 23% of the public said they felt Brexit would have a negative impact on property prices, with the remaining respondents saying they believed property prices would remain steady (33%) or rise (42%) as a result of the United Kingdom leaving the European Union.

Uncertainty can present opportunity, so if you are thinking of buying, selling, renting or investing, contact one of our Property Consultants today to see how WEST-The Property Consultancy can help and advise you.