With King Charles III’s investiture as King on Saturday (May 6), some in the mortgage industry have taken a look back on what has happened in the market since the coronation of the late Queen Elizabeth II in 1953.
Back in 1953, the average house price in the UK sat at just under £1,900. Adjusted for inflation, in today’s prices that’s comparable to about £42,600 – meaning house prices today are some 511 per cent higher.
Research from gradual homeownership provider, Wayhome suggests that when wage inflation is also taken into account, the average home buyer requires 7.8 times their income to buy a home today, compared to 5 times their income in 1953.
The actual cost of securing and repaying a mortgage is now far higher.Nicholas Christofi, Sirius Property Finance
This is based on an average annual income today of £33,402 compared to an average income of £374 in 1953. However adjusted for inflation, the average salary in 1953 is boosted to £8,463 in today’s value.
Wayhome co-founder and chief executive, Nigel Purves said although wage levels have increased notably in 70 years, they have clearly failed to match the pace of the UK housing market by “quite some margin”.
“The average homebuyer now faces a considerably larger hurdle when it comes to the cost of homeownership compared to 1953.
“So while this weekend was cause for celebration as we mark the end of one era and the start of another with respect to the reign of the royal family, those priced out of the property market will be hoping we don’t see the same meteoric rates of house price growth between now and the coronation of our next monarch,” Purves said.
Mortgage rates
Interest rates in the UK are currently lower than they were in 1953, but higher property values mean that people’s monthly payments are significantly more.
The current average mortgage rate sits at 3.99 per cent in the UK, 5.1 per cent less than the average rate back in 1953, according to an analysis done by debt advisory specialists, Sirius Property Finance.
Managing Director of Sirius Property Finance, Nicholas Christofi said: “A lot has changed in 70 years, and our country is no exception.
“But it’s still striking that comparable mortgage rates are actually lower today despite the numerous base rate increases seen since December 2021.
