UK house prices over time

Few numbers are argued over as fiercely as the price of a house. The line below tracks the average UK house price since 1975, using the Nationwide Building Society’s long-running index. Hover or tap anywhere on the chart to read off the price for a given year, the change on the year before, and how far prices have multiplied since 1975. The dots mark turning points worth knowing about.

The story in one breath: a steady climb through the 1970s and 80s, a speculative boom that peaked in 1989, a painful early-1990s crash that left many in negative equity (owing more than the home was worth), a long doubling-and-doubling through the 2000s on cheap credit, a sharp drop in the 2008 financial crisis, and then — after years of low interest rates — a fresh surge during the pandemic.

What the chart shows

On a normal (linear) scale the line looks almost flat until the late 1990s and then rockets — not because nothing happened earlier, but because a 20% rise on a £20,000 house is a much smaller step than 20% on a £200,000 one. Switch to the log scale and equal percentage moves take equal vertical space, which makes the 1980s boom and the early-90s fall just as visible as recent years.

A few episodes stand out:

• The Lawson boom and 1989 peak. Rapid growth, financial deregulation and the rush to beat the August 1988 end of double mortgage tax relief drove prices to a peak in 1989.
• The early-1990s crash. High interest rates (briefly 15% around Black Wednesday in 1992) and recession sent nominal prices down for several years. Roughly a million households fell into negative equity.
• The 2000s credit boom. From the late 1990s, low and falling interest rates, easier lending and rising demand more than tripled the average price between 1995 and 2007.
• The 2008 financial crisis. Prices fell sharply as mortgage lending froze, then recovered as the Bank of England cut its base rate to 0.5% and held it there for years.
• The pandemic surge. A “race for space,” a temporary stamp-duty holiday and rock-bottom rates pushed prices to a peak in 2022, before higher mortgage rates cooled the market.

Cash prices vs real (adjusted for inflation)

The headline numbers above are cash (nominal) prices — the pounds actually paid at the time. But a pound in 1975 bought far more than a pound today, so part of that 26-fold rise is just the pound losing value. Switch the chart to Real and every past price is restated in 2024 money, which is the fair way to compare across the decades.

The real line is the answer to “did houses beat inflation?” Where it rises, prices grew faster than the cost of living; where it falls (as in the early-1990s and post-2008 corrections), houses lost real value even when cash prices held up. The big picture: in real terms the average UK house has roughly tripled since 1975 — a large gain, but a long way from the 26× cash figure. That gap is the part of the “house prices always go up” story that inflation alone explains.

The deflator uses RPI inflation before 1989 and CPI from 1989 (the longest consistent consumer-price series); the exact real figures shift a little depending on which inflation measure you pick.

A note on “average”

There is no single official house price. Nationwide and Halifax build indices from their own mortgage approvals; the government’s UK House Price Index (from the Land Registry and ONS) uses completed sales and tends to read higher because it covers cash buyers and all property types. This chart uses the Nationwide series because it reaches back furthest on a consistent basis. The figures here are nominal — not adjusted for inflation — so part of the long climb simply reflects the falling value of the pound. They are also UK averages: London and the South East have risen far more than much of the North and Northern Ireland.

Sources

• Nationwide House Price Index — long-run average UK house prices.
• UK House Price Index (HM Land Registry & ONS) — the official sales-based index.
• ONS — Inflation and price indices, for the inflation context.