The real estate market in the UK is by far one of the most buoyant and profitable in the world. Over the last 2 years, there has been outstanding capital growth (26%+ in 2003), with property growth doubling, on average, every 6.2 years. Since 1956, the compounded average annual house price increase was 9.5% , and over the last 32 years, property has risen in 28 of the years and only fallen in 4.
Presently, there is a housing shortage in the UK with demand for new homes outstripping supply. In 2001, over 250,000 new properties were completed and 310,000 new households were created. The provision of new affordable housing is at its lowest for the last century, whereas demand is at its highest. In March 2004, the Treasury's Barker Review of Housing Supply found Britain needs to build up to 140,000 extra new homes a year if housing supply is to match demand. Furthermore, rents have risen on average 13% per annum since 1962.
Government plans to assist first-time buyers through a shared equity-scheme as well as new pension laws allowing to invest in property can see house prices rise by a 15% annually over the next few years.
Sources: DataStream, Dept. of Records, BBC.co.uk, Office of National Statistics.