Week 18, 2011: House Prices

Summary: According to Nationwide, UK house prices fell further this month, taking them down to 2003 levels. This is good news for some, but probably not unexpected as they have been well above the average for a long time now.

What does the chart show? This chart is fairly simple; the blue line shows the average price of a house in the UK in today's money, recorded quarterly. For example, back in 1975 the average price of a house was £10,388. Adjusting for inflation, that amount of money in 1975 is now worth £77,705, meaning housing in 1975 was just under half as expensive as it is today.

Why is the chart interesting? The cost of housing affects everyone, from home-owners to potential buyers to those who rent. The news this week from Nationwide that house prices in April 2011 were 1.3% lower than in April 2010 is good for those looking to buy, but bad for those interested in selling a house (especially if it was bought during the peak). Before the drop in April, prices looked to have steadied a little, but it now looks like they are probably set to fall further.