How much have home prices increased by since end of The Great Recession in 2009?

Eight years of quantitative easing (QE) and record low interest rates is estimated to have cost savers more than £160bn, but supported strong increases in the prices of property, stocks and bonds.

Analysis by online estate agents HouseSimple.com suggests that average UK home prices have increased by more than 40%, which equates to almost £60,000 since 2009, when interest rates were cut to an historic low of just 0.5%.

It is now just over eight years and three months since the day the Bank of England cut interest rates to 0.5% (the rate fell to its existing level of 0.25% in August 2016) and during that time the average price in the UK has increased by 41.2%, led by gains in Cambridge and London where the average property has almost doubled in value.

HouseSimple has analysed how much UK house prices have risen or fallen since March 2009, by looking at average house prices, based in Land Registry data, in 100 UK towns and cities between March 2009 and April 2017.

Overall, the South East has fared particularly well, with seven of the 10 biggest property price rises since March 2009. Cambridge, London and Slough have all seen average house price growth in excess of 90%. However, at the other end of the performance chart, Hartlepool has recorded a 9% drop, Durham a 6.2% fall, while prices in Middlesbrough are down 4.5%, In fact, all regions in the North East have seen prices fall.

The following table shows the UK towns and cities that have seen the biggest rises in average property prices since interest rates fell to 0.5% in March 2009:

The following table shows UK towns and cities that have seen the worst property price growth since interest rates fell to 0.5% in March 2009:

London

Across the capital, average home price growth has been particularly strong during this unprecedented time of record low interest rates, with prices rising on average 90.8%. The borough of Kensington and Chelsea tops the chart, with average prices increasing by 128.9%, while the less glamorous boroughs of Haringey and Waltham Forest have witnessed impressive price growth since March 2009, with price growth of 111.7% and 106.4% respectively.

The following table shows the London boroughs that have seen the biggest rises in average property prices since interest rates fell to historic low of 0.5% in March 2009:

The following table shows the London boroughs that have seen the lowest rises in average property prices since interest rates fell to historic low of 0.5% in March 2009:

Alex Gosling, CEO of online estate agents HouseSimple.com, said: “While UK savers have suffered over the past eight years, millions of homeowners have increased their equity in their homes substantially in this once-in-a-generation low interest rate environment. It’s been a golden period for UK homeowners, but there are signs that it could be coming to an end as the MPC narrowly voted to hold interest rates at 0.25%.

“House prices are also under pressure from the political and economic uncertainty of Brexit and the fallout from the disastrous General Election result for the Conservative Party. There is no evidence to suggest that property prices are about to plummet, but homeowners and home buyers do need to plan ahead, and make sure they can cover the impact of interest rate rises on their monthly mortgage payments.

“Many homeowners will have never seen an interest rate rise, and may believe rates will never rise. But they will eventually, and when they do, we could see rates rise by 1%-2% quite quickly. With many households already feeling the strain of higher day-to-day costs, monthly mortgage payments going up by several hundred pounds a month could tip them over the edge.”