Monday, 18 October 2021

47,021 per cent... That’s a price rise fit for a queen

HER Majesty the Queen has two birthdays every year (lucky thing).

HER Majesty the Queen has two birthdays every year (lucky thing).

She will celebrate with the nation officially on June 10. However her actual 90th birthday was yesterday (Thursday).

A lot can happen in 90 years, as Jackson-Stops & Staff knows well, having recently reported how house prices have risen by a gargantuan 47,000 per cent in that time.

Looking over the report, it is the magnitude of the increase — from an average of £600 to £291,505 — and the contrast between conditions then and now, that are the most striking to Standard Property.

A construction boom had begun by the mid-Twenties, and by 1939 home ownership had grown from about 10 per cent of households to about 30 per cent. Today it stands at 64 per cent.

A lack of affordable housing, and homes that are for sale generally, is the news these days. Jackson Stops & Staff estimates that such is the scarcity of housing that by 2038, when Prince Charles celebrates his 90th birthday, the average UK house price could be £1.3million.

In London, house prices have risen even faster. Again assuming that in the next 23 years house prices rise at the same rate as in the last 23 years (8.5 per cent per annum), then when Prince Charles reaches 90 in 2038, the average London house price will be £3.5million.

On the same basis when William reaches 90 years, London house prices will be £52.4million. When Prince George reaches 90 in 2103, London house prices will average £667million...

Jackson-Stops & Staff says it is the first to compile this “unique long run house price series”.

Tim Sherston, director at the Goring branch of the agency, says: “There is no doubt that average UK property prices over the Queen’s long 90 years of life have risen significantly, making residential property purchases a top-performing investment.

“It is not the fact that property has outperformed over the last 90 years that is surprising, but the sheer scale of it. The 471-fold increase would take a 65cm pot plant, which could easily fit under a kitchen table, to a giant tree that is taller than London’s Shard, standing at 306 metres.

“The reason for the phenomenal growth is that we are an overcrowded island with a growing, wealthy population who have an ingrained desire for home ownership.

“This growth in demand then meets a rigid wall of fixed supply that compounds the pressure on house prices to rise. Lack of new-build homes continues to be a pivotal issue and until more homes are built, more house price rises are inevitable.”

In other circles, the expectation that house prices carry on increasing for the rest of the Queen’s reign and beyond is causing speculation about likely property hotspots.

As local Henley people are all too aware, there is a lot of interest in property along the Crossrail route (to be renamed the Elizabeth Line in 2018, after the Queen).

Experts are predicting homes close to Crossrail stations — for us, that’s Reading, Twyford and Maidenhead — could grow by an average of seven per cent, with less expensive areas outpacing the rest.

Other highlights of the report are as follows:

• Since Queen Elizabeth II was born, in 1926, average UK house prices have risen from a modest £619 to £291,504 (based on the latest month’s ONS figures). This represents an incredible 471-fold increase over 90 years — implying a 47,021 per cent rise in average UK house prices.

• If a 250g pack of butter’s price back in 1926 had risen at the same rate as house prices, it would now cost £24.97 and one kilogram of Cheddar cheese would cost £61.26.

• Property easily outperforms gold, up 20,425 per cent and equities up 11,685 per cent over the same period.

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