UK Homes Are £34,000 Cheaper than in 2022
At first glance, that sounds impossible. Yet its true
Let me explain.
In 2022, the average UK home cost around £270,000.
Since then, UK inflation has risen 11.45%. Which means for property values to have kept pace with inflation, that £270,000 home should now be worth £304,400.
Instead, the latest average is £270,400 ... just £400 higher in three years.
In “real terms” (inflation adjusted), UK homes are 11.3% or £34,000 cheaper than they were in 2022.
You will say, Watkin, what about wages??
Since 2022, average UK salaries have risen 16.28%. After inflation, that’s still a 4.83% increase in real spending power.
So, British buyers today face a rare combination:
Homes are 11.3% cheaper in real terms than 3 years ago
Incomes are 4.83% stronger in real terms than 3 years ago
Mortgage rates are edging down
More homes are coming onto the market
That shift matters.
Inflation has squeezed households, but unlike the late 1980s, wages have kept rising. Which is why the share of income going on mortgage payments hasn’t spiralled back to the eye watering levels of a generation ago.
So - this why house prices wont crash anytime soon
Your thoughts?
At first glance, that sounds impossible. Yet its true
Let me explain.
In 2022, the average UK home cost around £270,000.
Since then, UK inflation has risen 11.45%. Which means for property values to have kept pace with inflation, that £270,000 home should now be worth £304,400.
Instead, the latest average is £270,400 ... just £400 higher in three years.
In “real terms” (inflation adjusted), UK homes are 11.3% or £34,000 cheaper than they were in 2022.
You will say, Watkin, what about wages??
Since 2022, average UK salaries have risen 16.28%. After inflation, that’s still a 4.83% increase in real spending power.
So, British buyers today face a rare combination:
Homes are 11.3% cheaper in real terms than 3 years ago
Incomes are 4.83% stronger in real terms than 3 years ago
Mortgage rates are edging down
More homes are coming onto the market
That shift matters.
Inflation has squeezed households, but unlike the late 1980s, wages have kept rising. Which is why the share of income going on mortgage payments hasn’t spiralled back to the eye watering levels of a generation ago.
So - this why house prices wont crash anytime soon
Your thoughts?
