Buying a house is probably the biggest single purchase any of us will ever make in our life-time. In the post-war building boom of the 1950s, anyone buying an average house could expect to pay less than £2000 for it. Mind you, they were probably earning only around £10 a week, so even back then, buying a house was a pretty tough ask.
By 1960, house prices had risen to around £2530 (adjusted for inflation now, around £60,000) and the average income had risen to around £1000 – so rising house prices go back a long way.
It is commonly imagined that house prices double every decade The truth is that house price rises are cyclical and there are times when the property prices actually fall. Even so, on AVERAGE, the statement is broadly correct for many parts of the country.
But why do houses go up in price?
Well, for one thing, prices tend to rise if people believe they are going to be richer in the future. If people are experiencing pay rises in an economy that is doing well, they are likely to want to buy a house and prices will go up.
Also, if interest rates are low and the banks and building societies want people to borrow, the more people will want to take on a mortgage and the more prices will rise.
The truth is that we Brits like to own our own homes – but there aren’t enough to go around. Therefore, demand outstrips supply and prices will tend to rise. How often and how much depends on many factors including the state of the economy and the location of your desired property.
According to Zoopla, 9.5 million homes in the UK earned more than UK’s average salary in the 12 months before August 2022 – in other words, they made over £31,000.
Of course, the same may not be said for this year when many forecasters are predicting a slight dip in house prices but for decades now, the overall trend has been up, up and away for house price rises.
Until the Truss/Kwarteng mini-budget in September last year, prices were rising at the rate of 9% on the previous 12 months. The shock of Trussonomics, however, sent the markets into the frenzy we are still recovering from today.
But none of this is answering the original question. How much will you make on your house? Well….it depends, but if you bought the average house 10 years ago, it will have cost you £175,826. Today, that same average house is worth £296,422. Assuming there’s nothing remaining on the mortgage, you’ve cleared £120,596.
However, if you’d bought the same property in 2000, it would have cost you just £89,597 and you’d have made a profit this year of a cool £206,825.
The only dark cloud on the horizon would be that you’d have to spend most of that to pay for somewhere to live.
For more information about how we at Howland Jones can get your home sold, please get in touch with us today.
We will do all we can to help you get your home sold in the first half of 2023. Our offices are based in the village of Measham in the East Midlands, and we operate within a 20-mile radius of our base, giving us extensive knowledge of the local area. Measham sits on the border of four counties and we are almost equidistant from Derby, Leicester, Nottingham and Birmingham.
You can find out all about us by getting in contact here.