House Price History - how the market has changed

Getting the best mortgage deal

This summer saw the England football team make it to the semi finals of the World Cup, inviting comparisons with the historic win back in 1966. Nostalgia swept across the country and led to a wave of then-and-now comparisons. One was the cost of housing.

The 60s

The post-war period began with a major house building programme. Private and local authority house building ran at a rate of around 400,000 homes a year. By contrast, the current government is targeting the building of around 300,000 new homes a year, hoping to have built more than one million new homes by 2020.

This was a time when houses were thought of as places to live, rather than the investments they have become today. Having a home, whether rented or owned, was a readily attainable goal for young couples. However, in the 1970s, house price inflation began to emerge in a form we’d recognise today, reaching 36% at one point.

The big council house sell-off of the 80s

Tenants who took advantage of their Right to Buy option in the 1980s saw the value of their property rise by as much as 16% in 1987 and a further 25% in 1988. The housing market tends to go through cycles and the boom times were followed by a period in which the economy dramatically slowed down. Borrowers saw their monthly repayments soar as the Bank of England base rate reached 15%.

Residential property prices fell, repossessions reached record numbers, and many found themselves in negative equity. It took until the late 1990s for the market to recover. 

The noughties

The start of the new millennium heralded a period of steady economic progress, but this was brought to an abrupt end by the 2007 crash which saw housebuilding go into sharp decline. Average house prices more than doubled from just over £80,000 in 2000 to just over £170,000 in 2007.

Then and now

Today’s average house price of around £214,000 is roughly eight times the national average wage of £26,500. In 1966, the average property was £3,586, around four and a half times the average wage of £798. However, August saw the biggest monthly fall in house prices recorded in six years, according to Nationwide, due in part, no doubt, to the uncertainties surrounding Brexit.