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House prices have grown at 2.5 times the pace of earnings in last 30 years

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
22/09/2022

Average UK property prices have rocketed compared to overall inflation since 1992

House prices have increased more than 2.5 times the rate of annual salaries over the last 30 years, growing 438% compared to just 160%, according to Finder.

The price comparison site said that property price growth has been more than 4.5 times the rate of inflation (93%) since 1992.

It found that rental prices have increased by a comparatively small rate of 142% over the same 30-year period.

It’s not only house prices that have outpaced inflation – petrol prices have surged by 338% and stamps are 296% more expensive than they were back in 1992.

The cost of a pint of beer has also risen faster than average salaries have grown, with a growth in price of 181%.

Price changes this year

Inflation is currently at its highest point in the past 30 years, with the majority of common items in the UK soaring in price this year.

Many outstrip inflation and almost all outstrip the growth in average salaries in 2022 (4%).

Electricity grew by the most of any commodity this year, rising by a huge 39% since 2021, over nine times salary growth. This was closely followed by the price of petrol which grew by 30% over the last year – seven times above salary growth. Even the cost of milk has risen by 20%.

The only thing in the study that didn’t see more growth than the average salary was rent, which has also increased by an average of 4% in 2022.

Michelle Stevens, banking, finances and mortgages specialist at finder.com said: “It’s clear from this data that the UK is experiencing extremely tough times when it comes to our personal finances, and the worry is that many Brits will not have sufficient funds to cope with further price increases.

“The significant increase in house prices compared with a minimal rise in annual salaries is indicative of a property market which could be set to unravel, with many first-time buyers choosing to wait on the sidelines as the economy looks set to enter a recession.

“On the other hand, the comparatively smaller increase in rental prices, which also matches the growth in average annual salary, means that it could make more financial sense in the current market to rent rather than purchase. The situation is only exacerbated further by the increasing cost of everyday items making it harder for British households to put any money aside to save month-on-month.”