Commentary – House Prices

House prices in the UK have risen sharply over the last 60 years. The coverage of the house price series shown is not consistent over the period but this doesn’t affect the main picture. In 1950 a ‘typical’ house cost around £2,000; in 2018 it cost around £280,000.

This is not merely the result of general inflation. House prices have risen in real terms too, though as the graph shows, the tendency to rise has occasionally be interrupted. There were noticeable falls in 1974, 1990, and of course in the period following 2006.

Whilst house prices in most countries have generally risen over the last 40 years the rise in the UK has been noticeably faster than in other advanced countries. The result is that nominal house prices in the UK are nearly 60 times their value in 1970. Other countries have lower – and most much lower – equivalent figures, apart from New Zealand. In real terms the UK’s ratio is the highest of all.

The graph below shows for selected countries an index (1975q4 = 100) of the ratio of house prices to disposable income per capita. This is a rough indicator of the affordability of the average house for the average person. It shows that for the UK the ratio is now almost 50% higher than it was in 1987. In Spain and Canada the rise in the ratio is similar. Japan’s, by contrast is 40% lower. This is a reflection of the prolonged bust in house prices that Japan following the boom in the 1980s.


1. UK Annual Nominal House Prices from 1930, £s. Source: ONS, Table 22 in House Price Index, December 2014: Annual Tables 20-39.

2. Seasonally-adjusted Quarterly (1970q1-) Index of Nominal House Prices, 2010 = 100. Source: OECD, Focus on House price Indices (Data in Excel).

3. Seasonally-adjusted Quarterly (1970q1-) Index of Real House Prices, 2010 = 100. Source: as above

4. Seasonally-adjusted Quarterly (1970q1-) Index of Ratio of Nominal House Prices to Nominal Disposable Income Per Capita, 2010=100. Source: as above.

Data series
Annual UK Nominal House Prices
Variables: UK Annual Nominal House Prices from 1930

Quarterly House Prices
Variables: Selected Countries' seasonally-adjusted Quarterly Indices of Nominal and Real House Prices and of Ratio of Nominal House Prices to Nominal Disposable Income Per Capita.

Download data
All the finance data series are available in Excel xlsx format:
Finances_Data.xlsx [228KB]