Thursday, 2 August 2018

How hot is property?

You may have noticed it’s been a little warm of late. But with thunder storms and rain forecast to hit us as I type, it looks like ten days of 30+ degree temperatures may be as close as we get to the record, which stands at 18 consecutive days, set in 1976.

Back then a pint of milk cost 9p, a loaf of bread cost 18p and, more on topic for my weekly property article, the average home in the UK cost £11,739. Compared to the average salary at the time (£2,651) a house cost 4.4 times the average annual income.

In the intervening 42 years the cost of a pint of milk has increased 389%, a loaf of bread 483% and, whilst average salaries have increased by a healthy 941%, house prices have done so by a whopping 1,728%!

With today’s average property price of £214,578 compared to the average UK salary of £27,600 it means the average home costs us Brits 7.8 times our annual income, which is close to twice as expensive comparatively as during the heatwave of 1976!

It also means those who bought a property back in the Summer of ’76 will have on average made a little over £200,000 on their purchase; around 7.2% per year on an annualised basis.

Of course, we all know that property in some areas are more expensive than others, so let’s take a look at which region saw the greatest increase in those 42 years. It won’t surprise many of you that accolade goes to London; where property prices rose from £14,862 in 1976 to £468,845 today - a rise of 3,055%.

On the other end of the scale is property in Northern Ireland. In 1976 Northern Irish property was more expensive than the UK average and only 14% below that of London. But the average price since then of £12,771 has ‘only’ risen by 967% to today’s £136,211 - meaning it is now the cheapest region of the UK and 71% below the average price of a property in London.

Scotland has only fared slightly better (+1,055%) and Wales isn’t far ahead either (+1,267%) meaning the majority of the house price increases have occurred in England. Only the North and Yorkshire & the Humber have failed to outperform the Welsh, which would have seen all regions of England outperform the other UK nations.

And just think, if we have to wait another 42 years to see such a heatwave again the year will be 2060 and if house prices have risen the same as they have done in the past, the average property price in the UK will be £3.7m! Now that is a thought to feel a little hot under the collar.

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(This article was featured in the Chichester Observer's property section on August 2, 2018)

Clive Janes, CRJ Lettings

If you are looking for an agent that is well established, professional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.

E-mail me on or call 01243 624 599.

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