Atelier boss Chris Gardner expects a prolonged period of recovery in market conditions given that since 1987 residential values have grown at 6.8% per year, a little more than double the rate of inflation.
The UK is thought to be approaching the bottom of the residential property cycle with an upswing expected in the coming months, research from specialist lender Atelier reveals.
Its latest report, ‘Past performance points to future potential’, compiled by Nicole Lux, Senior Research Fellow at London’s Bayes Business School, predicts a significant upturn in the market, pointing to a sustained period of recovery, stabilising interest rates and growing demand for housing.
HISTORIC TRENDS
Nicole LuxAnalysing primary data sources, dating back to the start of the ONS house price statistics in 1969, Lux examined long-term historic trends and forecasts a medium-term outlook for the key factors driving the property market, including property values, inflation, interest rates, demand, supply, mortgage rates, unemployment and population growth.
With the UK currently experiencing a period of decelerating growth in house prices, the report suggests that this will be a brief period of decline followed by a prolonged period of recovery.
For instance, in the last 55-year period, house prices have experienced significant deceleration of growth six times and we are currently in the sixth period, which began after ONS recorded a 3.96% decrease between July-August 2023
Periods of price decline last an average of 16 months and following each fall there has been a significant and typically prolonged recovery period.
Since 1987, residential values have grown at 6.8% per year, a little more than double the rate of inflation.
Chris Gardner (main picture), Chief Executive at Atelier, says: “In the UK, private enterprise delivers 60% of new housing – precisely because these developers are agile and can respond quickly to shifts in the marketplace.
“It is important for developers, in particular, to be agile enough to overcome short-term market volatility whilst progressing forward with a clear, long-term strategy.
“Property is a long-term asset class, and with the data now available to us, we are positive about the future.”
