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House prices rise 273% in 50 years

House prices rise 273% in 50 years

Category: Economy

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Buying a house is less affordable now than it was fifty years ago, according to a far reaching analysis of the UK housing market.

Research by Halifax has found that the average UK house price has increased from £2,507 in 1959 to stand at £162,085 in 2009, a rise of 273%, after allowing for the effects of inflation.

Equating to an average annual rise of 2.7%, this easily outpaces the 2% per annum average rise in real earnings recorded over the same period.

Despite the recent problems in the property market, house prices recorded their biggest increase in the latest decade with a real rise of 62% during the 2000s, marginally ahead of a 61% increase in the 1980s.

The worst performing decade for house prices was the 1990s when prices fell by 22% in real terms.

The research also showed that a north/south house price divide had widened since 1969, with prices in the south generally increasing more quickly.

Meanwhile, owner-occupation in the UK was found to have increased from 43% in 1961 to 68% in 2008, with the biggest rise occurring in the 1980s following the introduction of the Right to Buy scheme.

During that time the proportion of homes that are privately rented fell significantly, from 33% in 1961 to 14% in 2008.

The private rental sector had been bigger than both the owner-occupied and social rented sectors until the mid 1950s.

Martin Ellis, the bank's housing economist, said the last 50 years had witnessed some remarkable developments in the UK housing market.

"There has been a significant shift towards owner-occupation, with the majority of households now living in their own homes rather than renting. There have also been substantial changes in both the number of households and their composition; the typical UK household now is very different to 50 years ago."

He also added that the types of homes built had altered greatly both in terms of type and amenities.

Indeed, between 1960 and 1996, the percentage of households without an inside toilet fell from 14% to just 0.2%.

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