The number of UK properties worth at least £1 million is expected to more than triple between now and 2030, according to Santander Mortgages.
Currently less than half a million homes in the UK are valued at £1 million or more, but this is set to rise to over 1.6 million in the next 15 years.
Working in partnership with economist and LSE Professor of Economic Geography Paul Cheshire, Santander looked at the future of the UK property market with a focus on £1 million+ homes and what drives the market.
Its “Property Millionaires: The Growing Housing Divide” report found that by 2030, 25% of housing stock in London is expected to be valued at £1 million or more, rising to 70% in two London boroughs.
While 7% of homes in the South East are expected to fetch £1 million+ by 2030, less than 1% in the North East, Yorkshire and Humber, North West, Scotland and the East Midlands are expected to do the same, highlighting a stark geographical divide.
Overall, the average UK property price, which currently stands at £283,565 is expected to increase 23% by 2020 to £349,300. Fifteen years from now in 2030, the average UK property price will have almost doubled (97% increase), surpassing the half a million pound mark at £557,444.
While property prices are expected to soar, predictions suggest that incomes will not keep pace, resulting in an overall decline in affordability. At present in the UK, the average property price is 7.9 times the average income, but by 2030, this is expected to hit a multiple of 9.7. Again, this trend is elevated in London, where prices are currently 11.5 times incomes and predicted to rise to an eye-watering 16.5 by 2030.
Miguel Sard, managing director of mortgages at Santander UK, said: “Property price inflation will tip many existing home owners into the million pound price bracket but could also price some aspiring buyers out of the market if they don’t have the right support. The current property market is buoyant and the deals available to new and existing owners are extremely competitive, so those wishing to buy or move shouldn’t be put off.”