60 years of UK housing: Prices and quality up; volumes and sizes down

Published by Max Salsbury for 24dash.com in Housing and also in Development

The Halifax bank has published research looking at the UK housing market’s key developments since a year before Elizabeth II’s Coronation, and has discovered a world of falling volumes, rising prices, smaller sizes and increased quality.

The research found that house prices have nearly trebled since 1952, up by an average of 186% in real times, with prices increasing at an annual average rate of 1.8%, slighter faster than the 1.6% per annum rise in real earnings.

In nominal terms this is an increase of 7,278%, from £2,200 in 1951 to £162,338 in 2011. This is three times the rate of retail price inflation over the same period (2,477%).

The 1980s recorded the greatest increase in house prices, rising by 42% between 1981 and 1991. Meanwhile the 1950s was the worst performing decade when prices dropped by 7%.

Although 15 million homes have been built in the last 60 years, the number of houses being built each year has dropped by one-third since 1951, from 201,860 to an estimated 137,000 in 2011.

The drop has been driven by a large fall in the amount of public sector houses being built. There was an 81% fall in completions in the sector between 1951 and 2011. House-building reached record levels during the 1960s, with a peak of 425,830 units completed in 1968.

In better news, Halifax discovered that the quality of our homes has largely increased since the end of the Second World War.

In 1947, more than 42% of houses lacked a bath or a shower. By 1991 this figure had dropped to 0.3%. Also in 1947, 64% of homes had no access to a hot water supply. By 1991 this had decreased massively to 1%.

In recent times, homes that have a second toilet have risen by 10% since 1996, with the national figure now standing at 41%.

The research also found that the homes we live in are getting smaller. Homes of less than 50sq metres accounted for 9% of all residences built before 1980, with the proportion doubling after that point.

Martin Ellis, housing economist at Halifax, said: "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."