(Taken from Mortgage Solutions)
UK house prices have trebled in the past 60 years, widening the gap between average earnings and cost of housing, according to a report by Halifax.
Prices have risen by 186% in real terms over the last six decades, an average annual rate of 1.8%. This compares to growth of 1.6% each year in real earnings over the same period.
The report highlights the fastest levels of growth occurred during the 1980s, when prices increased by 42%.
The disparity between earnings and house prices has increased most in the past decade as house prices averaged 4.8 times gross annual average earnings. This peaked in 2007 when house prices hit 5.8 times the average salary, compared to an average of 3.9 over the past 60 years.
The report, commissioned to celebrate the Queen's Diamond Jubilee, also shows the number of new homes built each year has fallen dramatically over the same period, dropping one-third since 1951.
This drop has been driven by the dwindling numbers of houses being built in the public sector. Around 33,000 new public sector homes were built in 2011, a fall of 81% from 1951 figures. Total levels of housebuilding peaked in 1968 when 425,830 units were completed.
Martin Ellis, housing economist at Halifax, commented: "The UK housing market has undergone some extraordinary changes over the last 60 years, reflecting the changing way we live our lives.
"Today, the typical UK household is very different compared with the 1950s following the substantial growth in home ownership and the shift towards single occupancy households."
"The quality of our homes has improved markedly. House prices, however, have become prone to pronounced swings over the past 40 years and the rapid decline in the number of homes being built since the 1950s has contributed to the demand-supply imbalance that has characterised the UK housing market in recent years.
"This is likely to continue to play an important role in determining the landscape of the UK housing market over the coming years."
UK house prices have trebled in the past 60 years, widening the gap between average earnings and cost of housing, according to a report by Halifax.
Prices have risen by 186% in real terms over the last six decades, an average annual rate of 1.8%. This compares to growth of 1.6% each year in real earnings over the same period.
The report highlights the fastest levels of growth occurred during the 1980s, when prices increased by 42%.
The disparity between earnings and house prices has increased most in the past decade as house prices averaged 4.8 times gross annual average earnings. This peaked in 2007 when house prices hit 5.8 times the average salary, compared to an average of 3.9 over the past 60 years.
The report, commissioned to celebrate the Queen's Diamond Jubilee, also shows the number of new homes built each year has fallen dramatically over the same period, dropping one-third since 1951.
This drop has been driven by the dwindling numbers of houses being built in the public sector. Around 33,000 new public sector homes were built in 2011, a fall of 81% from 1951 figures. Total levels of housebuilding peaked in 1968 when 425,830 units were completed.
Martin Ellis, housing economist at Halifax, commented: "The UK housing market has undergone some extraordinary changes over the last 60 years, reflecting the changing way we live our lives.
"Today, the typical UK household is very different compared with the 1950s following the substantial growth in home ownership and the shift towards single occupancy households."
"The quality of our homes has improved markedly. House prices, however, have become prone to pronounced swings over the past 40 years and the rapid decline in the number of homes being built since the 1950s has contributed to the demand-supply imbalance that has characterised the UK housing market in recent years.
"This is likely to continue to play an important role in determining the landscape of the UK housing market over the coming years."
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