Where Do We Find Ourselves Now?
The 18-year property cycle only becomes truly useful when you can see how it might apply to the current property market. So let’s look at recent times.
Starting in 2000 UK property prices rose fast for the following decade, reaching an average of around £186,000 at the start of 2008. Following the financial crisis of the time average prices then crashed – by 17% on average – reaching a low of £154,000 in March 2009.
Prices then began a slow recovery – the early 2008 average house price of £186,000 was not reached again until spring 2014. Prices then continued on an upward trajectory with a mid-market dip occurring in 2018 and 2019 – the average property price of £231,000 during the summer 2018 fell slightly over the coming months and only returned to £231,000 at the end of 2019.
Prices began to accelerate rapidly in 2020 (even though many experts felt Covid would interrupt the cycle) and this continued throughout 2021 and 2022. The property market boomed, with more buyers than sellers and properties sometimes selling within days. Average prices reached record levels of around £238,000 in the summer of 2020, £260,000 in the summer of 2021 and £290,000 approximately during the summer of 2022.
By the end of 2022 average property prices were still around £290,000, and only fell back very slightly to £285,000 in spring 2023. This might represent the ‘winner’s curse’ period of the 18-year property cycle. It might suggest that buyers are still prepared to pay as much as during the boom years even though market conditions seem to be weakening.
* Price figures are based on average house prices from the UK House Price Index (UKHPI).