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History of house prices in Britain

Posted on 30 June 2021

Updated on 12th July 2022

Over the years, house prices in the UK have rocketed. So much so, it’s hard to remember a time when buying a new home cost less than £3,000. These days, you’d pay that much for a couple of months’ rent in some parts of the country.

It may not have been easy for you to get on the property ladder when you were younger. But if you managed it, all your hard work may really pay off now.

We look back over the last 70 years to see how house prices have risen, and whether our wages could keep up.

Timeline of house prices

1950

If you could afford to buy a home after the war, it was likely to be a brand new one. The average cost of a new house was £1,891 (around £69,042 in today’s money[1]) and the average salary was £10 a week (roughly £365[2]), so buying a property was no mean feat, even then.

On the upside, these new homes came with indoor toilets, revolutionising the way we did our business!

The electric fire, washing machine and humble fish finger were life-changing inventions of the era.

1960

House prices continued to rise along with the average income, which now stood at £960 (around £23,557[3]) per year. The average cost of a home was now £2,530 (approximately £62,084[4]).

By the end of the decade some of us were watching TV – in colour.

With these higher prices came mod cons. Most homes in the UK now had electricity, a fridge, cooker and TV.

woman-in-sixties-shift-dress-changing-channel-on-a-tv-set

1970

This was a rocky decade with widespread unrest and hardship on the one hand, and a boom in home ownership on the other.

The mortgage market took off and house prices flew. At the start of the 70s the average house price was £4,057.

In 1974, the first microwave was sold and four years later the VHS video recorder meant we never had to miss our favourite TV programme again.

Our average earnings climbed too. But this was when the gap between wages and house prices began growing wider and wider.

1975

The cost of home ownership continued to rise at lightning speed. By the end of the decade, the average house price had quadrupled to £19,925.

Avocado became the must-have colour for bathroom suites. And bathrooms became the place to ride your exercise bike.

man on exercise bike.

1980

Everything changed again. Margaret Thatcher gave people the right to buy their council houses. And house prices shot up like never before, reaching an average price of £20,268.

The world waited to see who shot JR in the TV series Dallas. And ‘Ghetto Blaster’ made it into the English dictionary.

1985

House prices rose 16% in 1987 and a further 25% in 1988 – the highest rise ever recorded. You could expect to pay, on average, £29,143 for a home.

Children of the 80s will remember wishing for an Amstrad, Commodore or ZX Spectrum home computer.

young-boy-in-school-inform-playing-a-home-computer

1990

Spiralling interest rates led to the housing crash at the start of this decade[5]. Even though property prices dropped by 20%, the average cost of a home was still £58,153 – twice as much as just five years earlier.

And a pint of milk cost 30p, compared to 52p today[6].

1995

Slowly but surely, house prices started to creep up again. You could now expect to pay, on average, £59,939 for your new pad.

In 1997, house prices were on average 3.6 times workers’ annual salaries[7].

2000

New millennium, new increase in house prices. And at almost £30,000 in five years, it was quite a big one. The average cost of a home reached £89,597.

Home gaming got serious – Nintendo sold its 100 millionth Gameboy console and PlayStation 2 was launched.

2005

In just five years, house prices leapt nearly £70,000. This meant the average property cost a staggering £156,236. While the average salary was around £23,900[8].

And popular TV show EastEnders – a staple across millions of UK homes – celebrated its 20th anniversary.

2010

Still on the up, but not such a huge jump, the average cost of a property reached £170,365.

Instagram was launched, and Apple introduced the iPad[9].

man on ipad.

2015

In 15 years, average property prices increased by over £100,000, meaning you’d need around £197,890 to buy a house. While the average salary had only crept up to £27,600[10].

Jeremy Clarkson was suspended from TV show Top Gear after a set-to with a producer[11].

2019

Sources show that the average cost of a home was £231,215 – that’s £229,324 more than in 1950. Quite a rise, wouldn’t you agree?

A new breed of beetle with antennae-like plaits is discovered. Scientists name it after teen climate activist Greta Thunberg[12].

House prices today

Home buying has never been that affordable. But it’s become less so in the last 40 years. In 1960s the average house price was just £2,530, compared to a staggering £281,161 today[13].

If you bought your home back then, and you’ve paid off your mortgage in full, you may be wondering, ‘how much has my house made me?’ Hopefully, the answer is quite a lot, and you’ll have enough equity for a nice little nest egg.

It could even be the perfect amount to help get your children on the property ladder or pay for a new kitchen or conservatory. Equity release, as it’s known, is a popular way to fund home improvements or leave an early inheritance.

So, while some people help their family by taking out over 50s life insurance or funeral cover, others choose to release tax-free cash from their home. It’s something you might want to think about when the time comes.

What else is more expensive now than back in the day?

It’s not just house prices that have gone up over the years. Here are a few items that aren’t quite as cheap as they used to be:

  • In the 1950s, a loaf of bread cost 4p, a pound of butter was 18p, a pint of milk was 3p[14]
  • In the 1960s, a season ticket to see Manchester United play was £8.50 and the players were paid a maximum of £50 a week[15]
  • In the 1970s, you could get two tickets to the cinema for less than 90p. And a brand-new Mini cost £600 (compared to £10,500 today)[16]
  • In the 1980s, a first-class stamp cost 12p, and a cut and blow dry at Toni & Guy hair salon was £23[17], while a portion of fish and chips was just 83p[18]

Sounds like a bargain, compared to today’s prices!

Sources

[1] in2013dollars.com (2022), CPI inflation calculator 1950 (£1,891)

[2] in2013dollars.com (2022), CPI inflation calculator 1950 (£365)

[3] in2013dollars.com (2022), CPI inflation calculator 1950 (£960)

[4] in2013dollars.com (2022), CPI inflation calculator 1950 (£2,350)

[5] The Times (2018), Brexit house price crash: why a 35% drop is unlikely

[6] Office for National Statistics (2022), Average price of milk per pint

[7] The Guardian (2017), Average house price at 7.6 times annual salary

[8] Trades Union Congress (2006), Average wages in 2005

[9] Hobbylark.com (2022), Year 2010 Fun Facts, Trivia, and History

[10] Office for National Statistics (2015, Annual Survey of house and Provisional Results (2015)

[11] Wikipedia, 2015 in the United Kingdom

[12] Bestlifeonline.com (2019), The 19 Most Interesting Facts We Learned in 2019

[13] UK House Price index (2022), Average price by property type in UK (all property types)

[14] The Mirror (2012), Back in the 50s

[15] MailOnline (2009), 1960: The year The Beatles formed, a loaf of bread cost 5p and a house £2,530

[16] The Guardian (2004), The cost of living then: 20p a pint, and a Mini for £600

[17] Thisismoney.co.uk (2007), How prices have changed in 25 years

[18] Inflationdata.com (2021), Cost of Living – Fish and Chips