Halifax maps out 60 housing market years
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by Gill Montia
Ahead of The Queen’s Diamond Jubilee celebrations, Halifax has been looking at the key developments in the UK housing market over the past 60 years.
The analysis starts a year before the coronation of Queen Elizabeth II, at a time when the country was still recovering from World War II, and key finding are as follows:
House prices across the UK have nearly trebled over the past 60 years, increasing by an average of 186% in real terms.
Prices have risen at an average annual rate of 1.8%, slightly faster than the 1.6% per annum average rise in real earnings over the period.
House prices in the 1980s recorded their biggest increase with a real rise of 42% between 1981 and 1991, greater than the increase of 30% over the last ten years.
The worst performing decade was the 1950s when house prices declined by 7% in real terms.
The UK housing market has become highly cyclical since the 1970s; there have since been four periods of rapid real house price growth (1971-73, 1977-80, 1985-89 and 1998-2007) and each period has been succeeded by a substantial drop in real house prices.
House prices have been the highest in relation to people’s earnings over the last ten years (4.8 as a multiple of gross annual average earnings between 2001 and 2011 and peaking at 5.8, in 2007).
Whilst more than 15 million homes have been built in the UK in the past 60 years, the number of houses built each year has fallen by one-third since 1951, from 201,860 to an estimated 137,000 in 2011.
The proportion of all completions accounted for by the public sector has dropped from 87% in 1951 to an estimated 24% in 2011.
There has been a marked reduction in the size of properties constructed during the last 60 years – homes of less than 538 square feet in size accounted for 9% all homes built before 1980 but the proportion doubled for homes built after 1980 (18%).
Home ownership has more than doubled over the past 60 years from 32% of all households in England in 1953 to 66% in 2010-11.
However, owner-occupation has been declining steadily in recent years since reaching a peak of 71% in 2003.
Finally, the proportion of homes in the privately rented sector in England has fallen by two-thirds since the 1950s, from 50% in 1953 to 17% in 2010-11.
Halifax housing economist, Martin Ellis, comments: “The UK housing market has undergone some extraordinary changes over the last 60 years, reflecting the changing way we live our lives.”
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