Today I was chatting with a client in Freehold. She was telling me that back in 1996, she had paid just £26,500 for her home. She’s made lots of alterations over the years. But 22 years later, I have just valued it at £225,000. This is almost 10 times the amount!
Our conversation progressed. She also owns another house that she lets out. Back in the 1970s, she paid just over £2500 and bought it with a 100% mortgage. We’ve just sold a neighbouring for £187,500 and it needs work! Who says that property isn’t a good investment?
We were telling our research team our story. They decided to look back to 1952, the coronation year of Queen Elizabeth II. A lot has changed over the past 70 years!
In 1952, the average price of a home was just £1,891. Adjusting for inflation that would be £57,997 today. At £267,620, the current average price of a home in 2022 is over four times that figure.
What is really interesting is that back in the 1950s over two-thirds of households were renters whereas today close to two-thirds of households are owner-occupiers. We also have to remember that like today, there was a big housing shortage. This saw an era of rapid housebuilding, as part of the post-war reconstruction. Today it feels like we have a rapid build of new housing developments. although some will argue, it is still not enough!
One of the biggest and possible hardest differences for buyers is that the average price of property in 1952 equated to 4x average annual earnings whilst now it equates to over 8x average annual earnings. This figure is based on the average wage v the average property price. Closer to home in Lancaster, the average property price is £165,200. According to payscale, the average is salary is £25,000. This equates to 6.6 x the average Lancaster salary.
If you’d like to chat about anything property related please get in touch. And when you are chatting with your parents or grandparents this jubilee, try and find out what their home would have been worth in 1957. I’d love to know!
Thanks for reading
Michelle x