Thursday, 6 October 2016

In which decade did house prices increase the most?

The audience at my recent Chichester property talk were stumped by the answer to one of my (slightly sneakier) questions. I showed them a chart tracking UK house prices since 1952 and asked “in which decade did house prices increase the most”.

What do you think?

UK house prices since 1952

Here’s the average cost of a home in the UK at the start of each decade to help you out:

1952: £1,891
1960: £2,189
1970: £4,378
1980: £22,677
1990: £59,587
2000: £77,698
2010: £162,887

Looking at the numbers you may well have come to the same conclusion as the audience; the ‘noughties’ saw the biggest rise; with house prices shooting up from £77,698 to £162,887 in a decade!

But in relative terms, it was actually the Seventies when prices really started to rocket; shooting up 418% in a decade, compared to an increase of 110% between 2000 and 2010. In fact, the ‘noughties’ was actually below the average percentage increase each decade on record has seen.

It’s very easy when looking at the numbers to see the huge increase in absolute terms and forget that an increase from 100 to 200 is actually the same in relative terms as an increase from 1 to 2.

I then recalled the story my dad had told me when I moaned about how “lucky” he was for being born as part of the ‘baby boomers’. He reminisced how he had bought his first home in 1976 for £12,250, taking out a £8,250 mortgage.

“See, you only needed a £4,000 deposit” I scoffed! Before being told he’d saved everything he could to accumulate what was more than the average annual salary at the time and nearly 40% of the value of the home.

Still, I said, buying a house for £12,250 seems something of a no-brainer! And yet at the time, my mum’s brother had warned my parents how that £8,250 mortgage would be “a millstone around your neck for the rest of your life”.

Plus, my generation haven’t had to deal with 10% unemployment and 15% interest rates (not yet at least!)

One thing my dad did agree he’d been lucky on was not taking an endowment mortgage! 

For fear of opening sore wounds amongst some readers I’ll end my trip down memory lane there…

(This article was featured in the Chichester Observer's property section on 6th October 2016)
Clive Janes, CRJ Lettings.


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