Chichester Property News: Which decade was best for house prices?

Thursday, 13 February 2020

Which decade was best for house prices?

I recently wrote about how it had gotten tougher during the 2010’s to get on the property ladder, as house prices rose by a third throughout the decade. This wasn’t the highest house price growth seen for any given decade though; far from it in fact. Which decade do you think was best for house prices (or worst depending on whether you were on the ladder or not!)?

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: £2,170
1970: £4,312
1980: £21,966
1990: £61,495
2000: £74,638
2010: £162,116
2020: £215,925

Looking at the figures showing average house prices over time, most people conclude that the ‘noughties’ had the most growth. With prices shooting up from £74,638 to £162,116 in a decade, the rise of 117% was certainly spectacular. And it’s true that the increase of £87,478 is the largest monetary gain of any decade…but in relative terms, it was actually the Seventies when prices really started to rocket; shooting up 409% in a decade.

It’s very easy when looking at the numbers or a graph 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. In fact, the 2000’s and 2010’s were both below the average percentage increase each decade on record has seen.

This made me recall 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 around a third of the value of the property. Plus, he added, my generation haven’t had to deal with 10% unemployment and 15% interest rates.

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”.

One thing my dad did agree he’d been lucky on was not taking out an endowment mortgage! For fear of opening sore wounds amongst some readers, I’ll end my trip down memory lane there…

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Thursday, 13 February 2020

Which decade was best for house prices?

This article was featured in...

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