House prices are set to increase 2% this year and climb 16.4% by 2030-31, according to the latest analysis by the OBR.
Coventry Building Society has calculated what average house prices would be, if all areas increase in line with the OBR prediction.
The average house price in the UK would climb from £270,259 to £314,581 and in London, the average price would go from £551,294 to £641,706.
The average first-time buyer house price in England would increase from £244,799 to £284,946, with London prices rising from £470,503 to £547,665.
Sarah Brown, senior strategy manager at Coventry Building Society, commented: “While a steady rise in house prices may be reassuring for existing homeowners, it risks making the path to homeownership even tougher for aspiring buyers. Even relatively modest annual growth quickly adds up, and a 16% increase by the end of the decade could mean needing tens of thousands more for a typical purchase.
“For first-time buyers in particular, higher prices don’t just raise the deposit hurdle – they also increase the size of the mortgage needed to get on the ladder. That makes it more important than ever for buyers to plan ahead, build savings early, and seek advice on the options available to them.
“The key question now is whether earnings can keep pace with house price growth. Interest rates also play a role in shaping what borrowers can realistically borrow and repay. Without supportive income growth, or easing borrowing costs, many new buyers may find the goalposts continuing to move further out of reach.”
