We couldn’t break for the weekend without mentioning the Jubilee! Never ones to miss the chance to produce a stat, mortgage lenders have been looking at house price data over the last 60 years and although it will come as no surprise that they have increased, the scale of the rise is eye-popping.
Nationwide’s house price index was first produced in 1952 and indicates that the average house price has risen from £1,891 to £166,022 in the last 60 years. That is almost an 88 fold increase during the Queen’s time on the throne. Halifax’s figures make for similar reading with an increase of 7,278%.
Those figures will be particularly tough for first time buyers to read, as they continue to struggle to find the funds to buy their own property. In fact the Office of National Statistics reported this week that in 2011 nearly 3 million young adults, aged between 20 and 34, were living with their parents.
That is a huge increase of 20% since 1997 even though the number of people falling into that bracket had remained largely static. It will be no coincidence that these figures are matched by the movement in average house prices.
As lenders continue to require larger deposits to advance mortgage funding, first time buyers have to live with parents for longer in an effort to build a bigger cash sum. Parents also frequently end up helping their children by gifting cash toward their purchase.
Mortgage lenders have looked to combat the need for bigger deposits by enlisting the help of parents as well. A number have designed products that can lend a high proportion of the purchase price by using parental assets such as cash or spare equity as additional security.
Either way it looks likely that the Bank of Mum and Dad will remain in demand for some time to come.