The UK Housing Market over the Past 50 Years

The UK Housing Market over the Past 50 Years

Bringing insight for lenders and borrowers in these difficult economic times, Lloyds Banking Group, the UK’s number one mortgage lender, offers a unique study into the last fifty years of changing trends in the housing market.

Using data from Halifax’s own extensive housing statistics, this report reveals:

• House prices have risen faster than earnings. They increased at an average annual rate of 2.7% since 1959, compared to 2% increase in real earnings.
• The north/south divide has widened. Prices have generally increased more quickly in the south than the north.
• There has been a dramatic improvement in the quality of housing. Households lacking an inside WC fell from 14% to 0.2% between 1960 and 1996. The proportion with central heating rose from 35% in 1971 to 92% in 2000.
• Owner-occupation has risen significantly since 1959. It has increased from 43% in 1961 to 68% in 2008.
• The number of households has increased significantly. There were 16.7million households in the UK in 1961, compared to 26.6million in 2009.

• The number of houses being built has fallen significantly. There were 44% fewer houses built in the UK in 2009 than in 1959.
• The relative size of the socially rented sector has shrunk. Its composition has also changed.  From 25% in 1961, the sector peaked at 33% in 1981. It has since contracted to 18% in 2008. There has been a marked shift away from local authority provided housing toward provision by housing associations.

Martin Ellis, housing economist at Halifax, said: “The last 50 years have witnessed some remarkable developments in the UK housing market.  There has been a significant shift towards owner-occupation with the majority of households now living in their own homes rather than renting.  There have also been substantial changes in both the number of households and their composition; the typical UK household now is very different to 50 years ago.

Levels of housebuilding have fallen sharply over recent decades, led by a reduction in building by the public sector.  At the same time, the types of homes built have altered greatly both in terms of type and amenities.  No doubt, there will be further dramatic changes over the coming years, most likely including the ways we are currently unable to foresee.”