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UK house prices rising at greater rate than inflation

According to a new study* house prices have beaten inflation over the past 50 years, despite the cycle being widely varied over that time.

Adjusted depending on inflation, house prices have risen 273% between 1959 and 2009, an average of 2.7% per annum. The quickest growth took place between 1999 to 2009, at 5%, whilst in the decade preceding house values actually fell 2.4%. This is the only decade in half a century that house prices have actually fell.

The study noted that the rise in house prices was in conjunction in the owner occupation of homes. In 1961, only 43% of people owned the homes in which they lived, whereas in 2008 that figure stood at 68%.

The proportion of privately rented properties also fell over the past 50 years, from 33% in 1961 to 14% in 2008. The current level is above the worst seen in 1991, at 9%, as increased lending has allowed investors to re-enter the market.

The most popular type of property during this period was the detached house, becoming much more popular after 1980. Semi-detached properties dominated the market before that, with 41% of housing stock built between 1945 and 1961 this type.

*Figures from Halifax

Source: Financial Times

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