UK Housing Market Stats and Graphs

A look at the main UK housing market data.

  1. House prices
  2. Affordability of housing
  3. Interest rates
  4. Supply of housing

House price inflation


Nationwide data

  • Annual house price inflation running at 8.3% in Nov 2014
  • London showed strongest housing market with prices rising 21%
  • Price of a typical home is £188,810 (Dec 2014)

UK House prices in past few decade


  • In 1975, average house prices were: £10,388.
  • In 2014, average house prices are: £188,810.

Real house prices

Real house prices are adjusted for the effects of inflation. This gives a more meaningful guide to how house prices have increased compared to typical prices in the economy.

This shows the real increase in house prices – rising faster than inflation.

Real house prices since 1975

  • In 1975, – average house prices (at 2014 prices) was £83,126.
  • In 2014 – average house prices – £188,810

126% increase in real house prices.

2. Affordability of Housing

First Time Buyers – House Price to Earnings Ratio


For UK first time buyers, the average house price is 4.4 times average earnings. In London, house prices are 6.8 times average earnings, whereas in the north, house prices are only 3.2 times average earnings.

Affordability of Mortgage Payments


Mortgage payments as % of income reached in a peak in late 1989/90 due to record high interest rates. Rising house prices meant that the % of mortgage payments grew in the 2000s. However in 2009, interest rates were cut to 0.5% leading to lower mortgage payments for homeowners.

Affordability index

The nationwide also produce an affordability index. Index base year 1985=(100)


Interest rates in UK


interest rates at the Bank of England

There has been a dramatic fall in Bank of England base rates (which has continued to remain at 0.5%) but the bank’s standard variable rates have fallen at a much lower rate. See more at explaining the gap between base rates and commercial lending rates.

Further reading: UK housing affordability

4. Housing Supply

In the post war period, construction of local government housing increased supply. Home builds reached over 400,00 a year in the late 1960s. However, from the 1980s, the government retreated from building houses, leaving it to the private sector and a small contribution from housing associations. Due to strict planning legislation, the supply of housing has failed to meet government targets.


Understanding supply constraints in UK Housing market

For example, in 2007, the government estimated they would need to build 240,000 homes a year until 2016, to keep up with growing demand. However, after the credit crunch, housing completions fell to 100,00 a year




Source: House building Quarterly Dec 2012


more data on housing market supply and future population trends

Housing Construction

housing construction

UK housing construction. see also UK construction

Type of Property


Between 1950 and the early 1980s, the percentage of homes which were bought, steadily increased, and the renting sector fell. Mrs Thatcher encouraged this trend in the 1980s, with a policy of encouraging home ownership. Mrs Thatcher allowed the sale of council properties to their tenants. The stock of social housing has fallen since the early 1980s.

However, the trend in home ownership has been reversed in the last decade, due to declining affordability of home ownership.


local authority housing stock has plummeted due to the popular right to buy scheme and transfer of housing stock to housing associations.

source: JRF Housing & Neighbourhood studies

Historical House Prices


The volatility of UK house prices. Though it should be noted these statistics show nominal house price changes. In the 1970s, high inflation rates magnified the nominal house price rises.

House prices adjusted for inflation


Even adjusted for inflation, we have seen strong growth in house prices. Real house prices

Mortgage defaults and arrears


Mortgage default rate statistics are produced by Council of mortgage lenders (CML). See repossession rates

Housing Benefits


Just under 5 million receive housing benefit, at an average of £93 a week. This is a rough annual cost of £23 billion.

More on UK Housing benefit



15 Responses to UK Housing Market Stats and Graphs

  1. W at Off-Road Finance September 20, 2012 at 12:58 am #

    Those housing price to earnings ratios are unsustainable. Anything over about 4 means that buying a house will be economically crippling. 6.0 is ridiculous.

    • Invest My Way June 6, 2013 at 2:58 pm #

      We are sitting at between 7 and 8 times in Australia. It is possible but certainly stymies any decent short term growth until income catches up.

    • Peter May 14, 2014 at 2:22 pm #

      Excuse me for pointing out the obvious, but why are those ratios unsustainable if interest rates stay low?

      It’s the ratio of house-price-multiplied-by-interest-rate to earnings that determines affordability, not ratio of house price to earnings.

      If rates fall as prices rise, then the first ratio remains affordable. If earnings rise, the ratio remains affordable.

      Interest rates have been on a downward trend for 25 years and inflation has been tamed, there’s no reason for that trend to change..

      • Tejvan Pettinger May 15, 2014 at 7:25 am #

        I just don’t think interest rates will stay at 0.5%. Even if rates increased to an historical low of 3%, it would increase mortgage cost.

  2. Paul December 31, 2012 at 4:53 pm #

    The UK as a whole will consist of hotspots and areas severely hit by economic woes. I believe that UK house prices as a whole will fall again in 2013 . Average house prices of course should be taken with a pinch of salt, there is no such animal. As a visual roadmap, I see price falls rippling out from London suburbs in concentric circles, getting worse as they spread. There will be hots spots of stable economy towns and these along with very desirable properties will be somewhat protected.

    • tom February 20, 2014 at 6:40 pm #

      well paul, you were wrong. nobodey can see the future…

      • Andrew July 2, 2014 at 6:20 pm #

        No-one could have forseen the governments funding for lending scheme. That alone collapsed rates for savers, and pumped 42 billions into UK housing.

        National disgrace.

  3. Sred December 8, 2014 at 2:32 pm #

    An instructive post. People to really know who they want to reach and why or else, they’ll have no way to know what they’re trying to achieve. People need to hear this and have it drilled in their brains..
    Thanks for sharing this great article.

  4. Bernard Ready January 19, 2015 at 12:19 pm #

    Post-war house prices were stable within about 10% for 25 years. Cut and paste to a browser

    Although I am no economist; I hope to learn a great deal from your recently discovered site; I have the great advantage, both of experiencing and implementing housing policies since the 1940s. Without a political input, it is difficult for economists to see the trees for the wood (intended reversal).

    Macmillan’s Grand Design for Housing (1953) mapped the motivations of policy for half a century, during which Conservatives served three times longer in government than Labour. The repeated mantras were ‘a property owning democracy’ and the intention ‘to restore the private rented sector as it was before the war’.
    Macmillan restored deregulation and reduced the standard of council houses to serve only a welfare need. Heath believed he could use the buried equity of the rented stock to fund rent subsidies that would allow him to raise all rents to the levels of the private sector. In 1971, He announced that his Housing Finance Act 1972 would double council rents. House prices doubled before he had time to implement his rent increases – an unrecognised and unreported economic event of the 1970s, I have many more.
    Thatcher realised that private rents could not compete with any form of investment for the provision of housing, so she abolished the low cost rented sector. The right to buy law gave away huge sales discounts. Effectively, she removed the growth of equity in the rented stock and prevented it from being used to reduce rents. This is still an unrecognised and unreported health warning of the RTB law, which implements the high rent policy that creates unaffordable unstable house prices and unaffordable rent subsidies.


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