Nick Churton of Mayfair Office looks back to 30 years ago and compares the property market then and now.
The impending royal visit to Australia by the Duke and Duchess of Cambridge and young Prince George reminds us of another royal visit made by Prince William in 1983 when he was eight months old. On that occasion his parents, the Prince and Princess of Wales, accompanied him.
Back then the UK property market was in much the same state as it is now – climbing out of a recession. The boom years of the late 1980s and the full significance of Mrs Thatcher’s Right to Buy policy were yet to come.
A great deal has happened in the property market over the past thirty years. Quite apart from two recessions – including the banking crisis of 2007 and its aftermath – the picture has changed dramatically. Back then the average price for a home was just under £50,000. Today Land Registry figures show that the average price in the UK is £168,356 – up by 4.2 per cent in a year. Figures just released also show that last month alone house prices saw their biggest monthly rise for more than four years.
According to the Nationwide building society average prices increased by 8.4% last year and some forecasters expect an increase of 8% in 2014.
Halifax has the longest running survey, going back more than 30 years. The bank estimates that over that period the increase in prices means that homeowners have been making the equivalent of 5.84 per cent a year – tax free.
If ever there was good news for buyers it was the Bank of England governor Mark Carney signaling recently that interest rates won’t rise for a year and even after that they will rise only slowly. It is difficult to think of another occasion when homebuyers had such advance warning that the mortgage rate won’t increase substantially for several years to come.
But another reason to think seriously about buying now is this: Should Prince George and his young family visit Australia in 2044 the average price of a UK home – if house price inflation remains the same – could be over £950,000. Now that is a right royal result!
Woods in Newton Abbot are members of the Mayfair Office.