House prices over the decades

I'm not sure if this is the right section but does anyone know what caused house prices to grow incredibly fast over the past couple of decades? I'm not entirely convinced it's population because total population hasn't changed much although annual change has been fluctuating greatly

House price time series:

Population time series:

(edited 5 years ago)

Are those real prices? inflation adjusted?

Reply 3

the bear

20

they started giving mortgages to any old Tom, Cressida & Harry.

Reply 4

RogerOxon

21

I would suspect the increase in buy to let has increased demand at the bottom-end, leading to increased prices that ripple-up. I'd also look at wage growth rather than inflation.

There's also the widespread view that you can't lose on property - people ignore price dips and ownership costs (maintenance, depreciation of fittings, insurance, interest, capital risk etc). Buy to let has become a popular pension scheme.

(edited 5 years ago)

Reply 5

Fullofsurprises

20

It's a combination of things. Most of the well paid jobs have migrated to London and the South-East, causing very large pressures on house prices in that region - but at the same time, lack of land, government policies hostile to social housing and the available land in London mostly being used to build speculative housing aimed at overseas buyers, have all caused significant upward pressure on prices in and around the capital. That has in turn led to a 'spillover' effect in which house prices have risen significantly across the Home Counties and most parts of Southern England.

In the rest of the country, the pattern is similar apart from the mass developments of luxury blocks for speculators. The general picture is one of insufficient new build, lack of development land, a government blockade on new social housing and hostile policies towards the release of land in country or exurban areas outside the existing suburbs. This has pushed prices up in all of the large cities across England apart from the far North. In Scotland and Wales, apart from a few hotspots, (Cardiff, Central Glasgow and Edinburgh), prices have largely stagnated.

The migration of all well paid jobs to the SE corner of the country has also created a large deficit of affordabl housing for the younger end of the population, who cannot afford the escalated prices, even if they are doing good jobs in London. There is a vicious circle of excessive concentration of work in London and the SE combined with house prices rising even more rapidly.

Brexit and other pressures appear to be slightly reducing pressures in London, but property will still remain unaffordable to most as jobs collapse at the same rate due to Brexit.

Reply 6

Quady

20

Interest rate cuts since 1990
Growth of joint purchases with spouce
Buy to let
London skewing the mean
Deflation in other areas of spending, clothes and food notibly

Reply 7

Quady

20

Original post by RogerOxon

I would suspect the increase in buy to let has increased demand at the bottom-end, leading to increased prices that ripple-up. I'd also look at wage growth rather than inflation.

There's also the widespread view that you can't lose on property - people ignore price dips and ownership costs (maintenance, depreciation of fittings, insurance, interest, capital risk etc). Buy to let has become a popular pension scheme.