The two everyday costs that have risen faster than house prices
16th November 2016
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The price of the average house in 1975 was just £10,388 (imagine that?!) but in 2015 that had risen to £188,566, meaning it had jumped 18 times in 40 years.                            

The pace of price rises has outstripped that of salaries – which are now 14 times higher than they were in 1975.

However, the rate of change has been much more drastic when it comes to medicines.
An NHS prescription cost just 20p in 1975 but by 2015 the price was £8.25 an item – 41 times more expensive.

A pint of beer has also shot up in price at a faster rate than house prices. You needed just 15p to sink a pint of bitter in 1975, yet in 2015 it would have set you back £2.96 – almost 20 times the cost 40 years ago.

While house prices have been on an upward trajectory, their relative cost compared to other purchases shows the true scale of the change.

In 1975, a house cost 5.74 times the average annual salary. By 1985 this was down to 4.74 times and 3.84 times in 1995 but shot up to 7.5 times the average annual salary in 2005 and 7.3 times in 2015.

The cost in relation to earnings has been highlighted as being an issue for Leeds. The National Housing Federation pointed out that people would need to be earning more than £40,000 to afford an average mortgage on a property in the city. With that in mind, the average Yorkshire worker would need a 62 per cent pay rise to purchase a home in Leeds.

However, it’s not all bad news! The average salary has actually risen faster than the price of a car, a cinema ticket or a pint of milk – meaning that they are all now proportionately cheaper than 40 years ago.

Interest rates are also dramatically lower than the 1970s. Back then the bank rate was over 11% and in 2015 it was 0.5%, meaning that although the costs of some things are up, the numbers coming out of a loan calculator were at least a little better.

About the Author

Patrick V

Member since: 1st November 2016

Patrick Vernon is a freelance writer, specialising in business and finance related content. Patrick has gained experience writing for a variety of magazines and websites, researching the latest money saving...

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