London properties’ average price is set to reach unprecedented levels, according to research by BNP Paribas Real Estate.
The British capital’s property market reached its peak in the last quarter of 2007, with prices at an average of £303,739 (€414,923, $472,460) according to Nationwide, before falling due to the economic crisis.
In the second quarter of 2015, homes sold for an average of £429,711 (€587,007, $668,407) – just over 40% higher than before the housing bubble burst.
But the findings presented in BNP Paribas’ UK Housing Market Prospects Summer 2015 report suggest that prices will rise by another 39% in the next five years, taking them to be 80% ahead of the peak-price.
Effectively, this would translate into properties selling for an average of about £547,750 (€748,254, $852,014), with growth rates of more than 10% forecast.
The report also predicts a rise in owner-occupied purchases throughout London, while in a turn of events deemed ‘highly unlikely’, investors could be forced to sell their off-plan units, which could affect the planning and development of new homes.
Outside London, the UK is expected to see 5.7% rise in nominal house prices, with the near-zero inflation supporting a slowing property market.
Breaking the UK into smaller regions, BNP Paribas predicts Scotland to clock the weakest growth in house prices – an aftershock of the 2014 Scottish Referendum.
The weaker economic regions in Wales and the North of England are also set for lower rates, but the report suggests the UK’s economic growth will positively affect those rates over the next four years.