You will be well aware of the petrol shortages that have plagued the UK this past week. In today’s world it seems petrol has become a necessity for many, with the fear of running out leading some to queue for hours to seemingly grab as much as they could. The same, however, could be said for property at the moment, with supply simply too low to fulfil demand. A few new-build sites have been in the press in fact, having had people queue for days to be the first in line when the sales office opens! That may also help understand why property prices in the UK have risen so much over the past few decades…even more so than fuel prices.
Ten years ago the average price at the pump was 129.9p per litre. Today it is reportedly 136.5p, which would mean an increase of just 5% in a decade. Compare this to property, whereby the average UK home sold for £165,649 in 2011, versus £255,535 today, and prices have increased by 54% in that same timeframe.
This year though, petrol has certainly leapt in price. We also feel its affects more as it has a bigger impact on our day-to-day lives than the (albeit bigger and more significant overall) property price increases. Having peaked in 2013 at 138.9p per litre, we had become used to (slightly) cheaper prices at the pumps, with the price of petrol averaging 123.9p per litre in March this year. That means fuel has increased in price by 10% in six short months; hence the furore over the current situation and the increase in prices we are witnessing across the supply chains.
Looking at data back to 1983, it shows we are not yet witnessing the steepest fuel price increase we have seen though. That happened in 2010, when prices rose by 24.4% (to 111.9p) in a year, having actually dropped by 13.5% the year before. We are, however, getting ever closer to setting a new record high average price at the pump across the UK.
As for property prices, their biggest increase came in 1989, when they rose a little over 30% in a year! Since last peaking in 2008, before dropping 15.5% the following year, 2020 did turn out to be the strongest year on record. It too means property prices are currently at their highest on record.
Hopefully the fuel rush will be over soon and things will go back to normal. Unfortunately, it is a little harder to crank up the supply of homes. As far as prices are concerned then, the continued demand for housing suggests property prices aren’t likely to abate any time soon. And the people queuing at the forecourts this week have demonstrated their thirst for fuel and willingness to pay more for it, so lower prices are unlikely to filter through at the pumps either.
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