Is the UK housing crisis escalating?
Visualizing the increase in average house prices while inflation soars
In the years following the first national lockdown in 2020, average house prices in the UK have increased by over £47,000. According to the British bank Halifax, the average price a house buyer needs to pay is now £286,079. In our line chart story below, we visualized the development of UK house prices and zoomed into the prices since 2020. Click next in the story below to zoom!
In April 2022, prices rose for the tenth consecutive month, thus increasing the annual rate of price growth to 10.8%. Last month alone, the market saw an increase of 1.1% which equates about £3000. We used a waterfall chart to visualize the cumulation of positive and negative house price rates across time.
Increasing living costs, wage freezes and a lack of affordable housing make home ownership out of reach for many. Low-deposit mortgages may not be of help either, since prospective homeowners can’t afford the monthly payments on the mortgages they will need.
These are just some of the factors that led to the UK housing crisis. And while the UK inflation – already at a 40-year high – may slow down the rate of house price growth, the prospect of higher interest rates and higher living costs still looms over home buyers.
Insufficient housing
High demand and low supply of newly-built homes began decades ago. Recent years show a slight increase of dwellings across the country, however, with the global pandemic as well as labor and material shortages, the government’s 300,000 homes a year target now looks more and more improbable.
We wanted to highlight the juxtaposition of new homes and population growth and opted for a dual axis column/line chart to display both in the same chart. Using colored axis titles and ticks, we made it easy to understand which axis provides the scale for which series.
In England alone, the number of homes being built fell significantly in 2020, piling further pressure on the nation’s housing shortage. Although dwellings picked up in 2021, there was a decline in the number of houses started (-3% since Sep 2021) and completed (-4%) in the last quarter.
First-home buyers are reliant on family support
Despite low affordability, the number of first-home buyers went up 98% in 2021, when compared to 2020. However, more than half (56%) of first time buyers are “reliant on family support”, according to Barclays.
In addition, the average age at which someone buys their first home is now above 30 across the UK, although most people started saving at the age of 24. Explore our interactive table below to find the average age of first-home buyers in your area!
A decline in people’s desire to take on big financial commitments wouldn’t be surprising given the current state of the economy. However, house affordability is unlikely to change drastically in the near future.
“House prices can’t escape reality for ever. Eventually buyers will have to face the fact that life is getting more expensive and unpredictable, and we’ll see these record price rises slow significantly,” says Sarah Coles, an analyst at the investment firm Hargreaves Lansdown, in front of The Guardian.