Business

Cost of living 'outstripped house prices in 2010s'

Dumped for sale signs Image copyright PA Media
Image caption The decade ended with a slowdown in properties being put on the market

UK house prices rose slower than the general cost of living in the last decade, bucking the boom of the previous 10 years, research suggests.

Property values were down by 1% from the start to the end of the 2010s after taking inflation into account, the Nationwide Building Society said.

Wages were also little changed under the same measure, so there was still little to cheer for first-time buyers.

Prices rose fastest in London, outstripping inflation by 24%.

In pure cash terms, UK house prices went up by 33% during the last decade, the building society said. However, during the 2000s, prices more than doubled in cash terms.

After adjusting for the rising cost of living, as measured by inflation, prices rose by 67% during those 10 years, with the decade starting with a house price boom and ending with the financial crisis.

Jonathan Samuels, chief executive of property lender Octane Capital, said: "It is not often that you celebrate weaker growth figures, but the performance of house prices in the 2010s may be an exception to the rule.

"Affordability is still a major hurdle after just 33% growth, so if the trajectory of the noughties had continued, the market would have been beyond the reach of many more people."

Changes over time

It was a similar picture in the 1980s and 1990s, according to the Nationwide research. The earlier decade saw UK house prices go up by 42% after adjusting for inflation, followed by a 14% fall in the 1990s.

The regional picture, as is often the case with the property market, was varied.

London may have seen a recent slowdown, but it still registered the biggest price rises in the 2010s. During the previous decade, it was further down the list, with prices rising fastest in the Yorkshire and Humber region.

At the other end of the scale, house prices in Northern Ireland rose by 71% in the 2000s, but then fell by 24% in the 2010s after taking inflation into account, the Nationwide said.

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