Have house prices outperformed inflation over the longer term?

the_boot

Question as the thread title suggests - have UK house prices outperformed inflation (over the long term)?

What would the best sources be to demonstrate this?

Generali

the_boot wrote: »

Question as the thread title suggests - have UK house prices outperformed inflation (over the long term)?

What would the best sources be to demonstrate this?

Yes they have: on average they've risen in line with wages.

You can get historic Nationwide and Halifax price indicies from the respective websites and historic RPI from the UK Government.

IveSeenTheLight

the_boot wrote: »

Question as the thread title suggests - have UK house prices outperformed inflation (over the long term)?

What would the best sources be to demonstrate this?

There were graphs that showed over the last 30 years, house prices were roughly 2.7% - 2.9% compounded above inflation.

P.S. I'm surprised with the latest news announcements that many do not see this as a secondary "dead cat bounce"

Cyberman60

My house is now worth over four times what I paid 26 years ago, so it's pretty safe to say, YES !!!!

Also, bear in mind all gains are tax free on your main residence, whereas on shares you are likely to be liable to Capital Gains tax.:D

theEnd

They've outperformed wages, but not as much as people might expect:
http://www.thisismoney.co.uk/money/comment/article-2595298/House-prices-vs-wages-just-bad-property-inflation-been.html

They've outperformed 'inflation' by more, but I would largely ignore that. Too many other factors involved and too many changes to their calculations.

The inflation of the broad money supply (supply and demand of debt) is a much closer correlation.

ging84

inflation adjusted house price inflation since 1975 has been about 2.9%

Thrugelmir

Generali wrote: »

Yes they have: on average they've risen in line with wages.

Though diverge from the norm depending on interest rates.

With wage inflation excluding bonuses only at 0.6% and an interest rate rise on the horizon. Could never be clearer indicators.

missjames

it depends how you measure inflation? Do you use the governments numbers or real world numbers like food and utilities going up so much of late.

Thrugelmir

ging84 wrote: »

inflation adjusted house price inflation since 1975 has been about 2.9%

Doesn't forecast the future though.

ukcarper

Thrugelmir wrote: »

Doesn't forecast the future though.

Maybe not but it does ans the first part the OP question.

Thrugelmir

ukcarper wrote: »

Maybe not but it does ans the first part the OP question.

I know. Always best to understand the events that shaped and created the scenario though.