Why do UK property prices keep rising?
Published Aug 03, 2021
Some of the factors affecting house prices are:
- The population of the UK is growing at a rate of between 4.5% to 5% per annum and is expected to reach about 70 million by 2028 (Office on National Statistics).
- Not enough houses are being built to satisfy the housing demand, creating an ever-increasing demand for housing. This in turn, raises house prices.
- During the 1980s, council houses were sold in their millions due to government policy. As a result, large scale housing construction projects by most public bodies have been all but abandoned. This is partly through policy and partly owing to a lack of funding.
- The private sector was expected to cover the shortfall, but this hasn’t happened for various reasons.
- UK is a small island compared to most countries around the world, with relatively few areas that are considered suitable for building houses.
- Some landowners are holding on to land which would otherwise be suitable for housing, until such time as the value of land reaches its peak.
- Local authorities are extremely guarded about granting planning permission, especially where there are areas of outstanding natural beauty.