The latest research by Benham and Reeves has looked at house price performance in previous leap years and what it could mean this time around for a market recovering from a prolonged period of Brexit uncertainty.
The lettings and estate agent analysed the annual UK average house price each year from 1980 until today, singling out price performance in each leap year and how it compared to the previous year.
Figures show that over the last four decades, house prices in leap years have increased in all but two of the eight leap years within that time frame, with one decline coming in the lead up to the 2007 market crash, and the other following the crash in the early 90s.
The average annual house price growth during a leap year sits at 7.3% compared to the year prior, meaning that with the average house price for 2019 finishing at £321,555, the average UK house price could hit £248,459 this year, Benham and Reeves suggests.
What’s more, house price growth in the months following each leap year rose at an average of 5.1%, with homebuyers completing in a leap year also seeing house prices finish each respective decade at a higher value.
In the capital, this average leap year price growth jumps to 8.1%, which would push the current London average to £510,799 for the current leap year. Similarly, each leap year witnessed prices over the following year increase by a further 5% on average.
Anita Mehra, managing director of Benham and Reeves, comments: “Historically, house prices in leap years over the last four decades have seen pretty consistent growth on an annual basis compared to the previous year, as well as the year following, which is great for homeowners who may be thinking about selling or home buyers currently completing on a purchase.”
“The figures also show that aside from the market crash, purchasing a property on a leap year is almost certain to see you finish the decade in a stronger position financially than when you bought your home.”
Mehra predicts that history will repeat itself this year. Despite emerging from a period of muted house price growth due to political uncertainty, early market indicators suggest confidence is returning to the market and house prices are set to increase at a healthy rate over the coming year.
“Should we see the average leap year price growth of previous years materialise, we could see the average UK house price hit nearly £250,000, climbing to over half a million in London,” she concludes.