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by smcl
1441 days ago
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I did some very rough spreadsheet work, collecting average UK house prices[0] and rates of inflation[1] and tried to figure this out. So starting with January 2007's average price of GBP 176,758 I tried to repeatedly apply the annual interest rates I end up with: * Jan 2007 price (inflation adjusted to 2022): GBP 243,199 * Jan 2022 price (actual): GBP 273,762 So it seems that in the UK at least the prices do seem to grow ahead of inflation. And the starting price we're talking about here is after a long, sustained housing bubble and was already quite unaffordable for many. Further still I think many people's wages have kept pace with inflation. So looking at the raw price changes doesn't tell the whole story, but the whole story is still quite grim. [0] = https://www.statista.com/statistics/751605/average-house-pri... [1] = https://www.worlddata.info/europe/united-kingdom/inflation-r... |
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Inflation: 243,000/177,000-1=37%
House: 274,000/177,000-1=54%
In 2007 the yearly wage for a 22-29 year old was 20,000 pounds, in 2021 it was 26,000:
https://www.statista.com/statistics/802196/full-time-annual-...
26,000/20.000-1= 30%
If you try with an higher income, let's say 30-39, respectively 26,000 and 33,000
33,000/26,000-1= 27%
I think we can say that average houses have appeciated almost double average wages in these 15 years, which is the essence of the crazyness about houses being not affordable to most, and - as you said - it's not like in 2007 houses were cheap, data for a longer period show even more how young people then could actually buy a house and now it has become impossible:
https://landregistry.data.gov.uk/app/ukhpi/browse?from=1990-...