There have been many interesting articles published this week about the property market, and there was one item I read which I wanted to mention.
I started my Articles in September 1988, and I remember on my first day having to fill out tax returns to enable people claim MIRAS tax relief. I have to admit that my memory of it is a little hazy, but I seem to recall that it was on the duplicated sheets; I may be wrong.
I was fresh out of law school, did not really understand the economy, and did not understand the significance of what I was doing. I do remember my training partner telling me that they had been busier with people moving house before that deadline than he had ever been but to me – naïve, excited, and just pleased to have had an offer of Articles – I nodded as if I understood what he was telling me.
As my interest in conveyancing grew, I realised how what I did as a job was about people’s lives. I remember when the interest rates went up a few times in one day and I knew I would probably have to get a lodger to cover my own mortgage repayments. I also remember how at that time, buyers who had mortgage rates fixed at 10% thought they had a really good deal. But I have read a lot recently about why that was different.
So, think about this: in the 1990s, the average UK household income was £20,448 and the average UK house price was £57,726.
In the 2020s, the average UK household income is £37,100 and the average UK house price is £237,834.00.
Just look at those figures and think about it. That is staggering.
I guess that part of it is due to homeowning becoming a real aspiration in the 1980s, and it has also been encouraged by schemes such as Right to Buy and Help to Buy. There was a growth in mortgage lending as it became far easier to obtain a mortgage, and interestingly, it was between 1997 and 1999 that interest rates hit an “all-time low” of 5.5%. Imagine that!
Looking at 2015, increased buyer demand, a decreasing supply of properties, and rising interest rates saw less first-time buyers coming into the market, but one of the biggest changes for the housing market was in 2017 when the government abolished stamp duty for first-time buyers up to a price of £300,000.00. Since then, the government have made various announcements about stamp duty which have led to cliff edges.
But go back to the figures about household income and house prices. That is what I want to leave with you this week.
1990s: the average house price was £57,726.
2020s: it has risen to £237,834.
That is staggering…
This is written by a real high street conveyancer who wishes to remain anonymous. Read more in Today’s Conveyancer every week.
