Sixty years on: how times have changed.
With the country celebrating the Queen’s diamond jubilee, it seems appropriate to compare the housing and mortgage markets of 60 years ago and today. This informative trip down memory lane by the Council of Mortgage Lenders (
CML) covers the significant changes. Outlined below are the key points - follow the link at the end to read to full article.
Housing and construction
The UK managed to construct 248,000 new homes in 1952 – an impressive total compared to 145,000 built in 2011.
Changes in tenure
When the Queen began her reign, there were 4.1 million owner-occupiers and another 2.2 million renting in the social sector. Around half of all UK households (6.5 million) were renting privately. By 2010, the number of UK owner-occupying households had more than quadrupled to 17.8 million. There were 4.9 million households renting in the social sector, a total that had been diminished since the 1980s by right-to-buy legislation.
Property prices
While the stock of homes has almost doubled in 60 years, the rate of increase in property prices has been on a much more dramatic scale. In 1952, the average price of a UK house was £1,891. But by the first quarter of this year, it had risen to £161,000, according to the Land Registry – an increase of more than 80-fold.
Changes in the mortgage market
In 1952, there were just 1.65 million borrowers. Now, there are around 10 million mortgages held by owner-occupiers, a six-fold increase. The last 60 years have also seen huge changes in the way in which the lending industry operates, and in the types of mortgages available to borrowers. In 1952, there were 800 societies operating in the UK. Today, there are more than 50 building societies.
Types of mortgage – and rates
According to English Housing Survey (EHS), there has been a significant decline in the proportion of buyers relying on savings to help finance their property purchase (from 58% before 1970 to 37% between 2000 and 2006). Only 21% of borrowers relied on the proceeds from the sale of a previous home before 1970, a proportion that had risen to 56% in the period between 2000 and 2006.
Interest rate volatility
For long periods of the Queen’s reign, there has been considerable volatility in the rates paid by mortgage borrowers, especially for a period of around 25 years from the early 1970s onwards. In the latter part of the Queen’s reign, borrowers have also had a wider choice of fixed or capped mortgages to protect themselves from volatility in borrowing costs.
So, at a time of national celebration, we should also celebrate our equal rights achievements. Sixty years ago a woman would not have been able to take out a loan without her husband or father acting as a guarantor. Read
Sixty years of the property market: How times have changed.
