Housing Market Statistics

Average UK House Prices

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Despite a set back in 2008, UK house prices have remained stubbornly high.

House Prices Since 1960

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Real and Nominal House Prices

Real house prices take into account the effect of inflation.

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real house prices - series 2 (Red)

Nominal house prices - series 1 (blue)

Annual Percentage Change in House Prices

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Equity Withdrawal

Housing Affordability

Despite the fall in house prices during the credit crunch, UK house prices remain expensive compared to long-term house price trends. It is still very difficult for first time buyers to get on the property ladder.

House Price to Earnings Ratios

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First Time Buyers House Price to Earnings Ratios

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Overpriced Houses

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The housing Bubble was a global phenomenon. Overvalued housing markets

Housing Market and Economy

It is no coincidence that the fall in house prices led to a fall in economic growth.

Falling house prices depresses confidence and creates negative equity. It leads to equity withdrawal drying up and consumer spending falling.

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source: ONS

Interest Rates

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After periods of very high interest rates in the 1970s, 80s and early 1990s, the UK has benefitted from a long period of relatively low interest rates.

Since March 2009, interest rates have been at record lows of 0.5% - An unprecedented response to the global downturn

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This was a reflection that even cheaper interest rates don't solve the shortage of finance experienced in the credit crunch. see: Credit Crunch Explained.

Base Rates v Bank Rates

However, commercial banks, don't always pass on base rate cuts to consumers, but leave their SVR (Standard Variable Rate) above the base rate.

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This means the cost of mortgages to consumers remains relatively high.

Supply of Houses in UK

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The number of new homes built in UK has always been less than government's target of 250,000 a year.

Owning vs Renting

Unsurprisingly, the difficulty of getting mortgage finance for first time buyers has seen a reversal in the trend towards home-ownership. Now nearly 50% of under 30s privately rent, and only 30% own with a mortgage.

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North South Divide in UK House Prices

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House prices in London have continued to rise faster than national average. See north v south house prices for reasons why.