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UK house prices have jumped to an average of £294,329 from £1,692 since 1953, “the most unaffordable level in about 150 years”, the Leeds Building Society reports as King Charles prepares for his spring coronation.
The joint publication notes that when Queen Elizabeth ascended the throne in 1953, the average house cost £1,692 and the average salary was £333.
However, in the months leading up to the coronation of a new king on 6 May, the median house value was £294,329 and the median salary was £31,928.
The study says new home buyers have 5.9 times higher average home price-to-earnings ratio than ever before.
“This especially affects young people and their ability to gain a foothold on the housing ladder. Homeownership rates among 25-34 year olds have collapsed over the past 30 years,” says the lender.
The two biggest rises in house prices occurred in the 1980s, when they jumped 262%, and in the last two decades, 341%.
However, the biggest increase in house prices was in 1973, marked by rising inflation caused by the oil crisis, when house prices rose by 36% annually.
Over the past seven decades, the employment rate of owners has risen, although it has declined in recent years.
In 1953, the proportion of people who owned their own home was 31%, and in 2003 this figure gradually increased to a peak in England – 70.9%.
They then fell steadily until early 2017, when the trend began to reverse. This rollout is now stalled and the homeownership share is 64%.
The 1980s saw the largest increase in owner employment rates due to former Prime Minister Margaret Thatcher’s right to buy policy. Nearly two million more people became homeowners during that decade.
The Building Society notes that the number of homes built has declined decade after decade, falling 69% since the 1960s.
The 1960s saw the largest number of new homes built, over 3.5 million.
But since then, the number of new homes built every decade has been declining, with the latest data showing just over 1 million new homes built in the 2010s, the lowest since the war, the firm says.
Other factors have also exacerbated the national demand for houses.
The UK population has grown by 20% since 1971 to over 67 million people.
In addition, over the past 50 years, due to a combination of an aging population, an increase in divorce rates, and an increase in the number of people choosing to live alone, the share of one-person households has risen to just over 12%. in 2021 from 3% in 1971.
“These changes have increased the demand for real estate,” the exchange notes.
The lender says the UK is projected to need 5 million new homes over the next 15 years – an average of 340,000 a year.
He adds that this is more than the government’s goal of 300,000 and has not been reached since 1971. The average number of homes rented each year over the past decade is less than half that figure.
Leeds Building Society Senior Economist Andrew Cooke says: “The housing market has experienced many ups and downs over the past 70 years and while housing is currently the most affordable for about 150 years, the market is still supported by strong fundamentals.
“But the government’s long-term goal should be to solve the severe housing shortage. The challenges facing homeowners are deep-rooted and wide-ranging, but building enough homes to meet demand is the right place to start.
“Achieving these goals will be challenging, and achieving this level of housing construction will require all parts of the market, from private developers to housing associations and local governments.
He adds: “Now is the most difficult time to afford a home since our founding in 1875, a sad reflection of decades of inaction in the UK’s housing crisis.
“Overcoming the crisis of homeownership is a complex and often controversial task, but with sufficient political will, it is certainly possible to overcome the age-old problem and begin to realize the aspirations of millions of people regarding homeownership.”
The Leeds Building Society used a variety of sources for its study, including the Land Registry, the Building Societies Association, the Office for National Statistics, the Bank of England and the English Housing Survey.
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