Overview of the UK property market over the last 30 years
Since we are celebrating 30 years of business this year, we have decided to take a look back at the property market over the last three decades, focusing on 1991 to 2021. There have been highs and lows, challenges and victories, booms and busts. As the property market continues to change, it is important for us to understand where we are now and how we got here.
The property market has been changing dramatically in recent years with house prices soaring and rental prices following suit. The main reason for this change is a combination of the Covid-19 pandemic, rise in consumer purchasing, help from the government, overseas money and inflation.
Alongside this, the value of people’s homes has continued to go up since 1980, with market corrections being overridden by continued property price inflation. House buyers have been encouraged by government schemes such as “Right to Buy” and “Help to Buy“. According to Land Registry data, the average UK house price rose from £50,000 in 1990 to £250,000 in 2020.
1980 – 1990
To provide context to the 1990s, here’s a brief overview of the property market in the 1980’s.
Home-owning became a real aspiration, as Prime Minister Margaret Thatcher under the 1980 Housing Act, introduced the ‘Right to Buy’ scheme. This gave people the opportunity to buy their own council house at a heavily discounted price. By 1988, the average discount was 44%.
In 1980, the average house value was just over £23,287 and by 1983 the average price had risen to £27,623 according to Nationwide .
Jump to 1985 and prices had spiked up even further. The average home was selling for an impressive £34,377 .
From a financial perspective, both the 1980s and 1990s saw a growth in mortgage lending as it became far easier to secure a mortgage as strong confidence in the country’s economic growth continued to push up house prices.
Interest rates went up in 1988 and stayed at an average of 15% until 1992. This saw one of the biggest house price increases seen by this point, with homes selling for an average of £51,405 that year .
1990 – 2021
Now, let us dive deeper and take a look at the property market cycles over the last 30 years, highlighting the key milestones of the market from starting in 1990 and ending in 2021.
1990 – 1993
In 1993 the UK saw one of its biggest recessions since World War II. In 1990 the average house price had reached £57,683. By 1993 it was averaging at £51,210 .
By 1996 the market had recovered, and the average home was selling for £53,394, having risen from just under £51,815 in 1992, and interest rates were still on the rise .
1997 – 1999
Interest rates took a dramatic dip from 1997 to 1999 – averaging at an all-time low of 5.5% by 1999 .
This also coincided with a change to interest-only mortgages from 1996 onwards, which made it even easier to borrow money and pay less off your mortgage than before. This is where things started to go wrong for many people who had borrowed large amounts of money against their homes.
2002 saw a mini-property price boom, as the average house price reached £106,406 – an increase of 18% on the previous year (2001 £88,799) .
This was partly due to growing confidence in technology sector companies at the time with recruitment activity expanding and therefore increased demand for housing from workers seeking accommodation closer to their workplaces.
As house prices continued to rise, they pushed a large proportion of British households out of home ownership, with many renting for the first time. In 2006 house price inflation peaked at over 14% according to the Nationwide Building Society.
In 2008, after the credit crunch and the global financial meltdown, the average UK house price fell 15% between January 2008 and May the following year, according to the Office for National Statistics, and it became harder to obtain a mortgage.
The average UK house price in 2008 stood at £168,973 .
The housing market started to recover in 2012 and the average house price rose to £193,900. 
The government-backed Help to Buy scheme was introduced in 2013, which aimed to inject some life back into the property market and boost house building. The scheme enabled buyers to purchase a new-build property with a mortgage of 75% of the value of the property, leaving buyers needing to find a cash deposit of just 5%.
The UK property market was mixed in 2015 with increased buyer demand combined with decreasing supply of available properties as well as rising inflation and interest rates. However, this year saw a reduction in the net total house sales which was primarily attributed to fewer first-time buyers entering the market. The price of the average home increased to £193,900 in 2015, according to Nationwide.
One of the biggest changes for the housing market in 2017, was the government announcement to abolish Stamp Duty for first-time buyers purchasing a property up to £300,000.
House prices increased by 3% over the year to January 2017, with the average price in England now £209,935 .
House prices shrugged off Brexit uncertainty to end 2019 1.4% higher than at the start of the year, according to the Nationwide Building Society, with the average property price in the UK standing at £215,333 in 2019.
Despite Covid19 hindering the economy throughout 2020, and the property market closing for several months, the government and central banks took measures to stop the property market crashing, introducing furlough pay, the stamp duty holiday and a ban on tenant evictions.
According to GOV.UK, house prices increased by 10.2% in the year to March 2021, up from 9.2% in February 2021. The average property price in the UK was £231,000 in 2021 .
There’s optimism around the property market at the moment, with buyers competing over homes in the most sought-after areas. The rise in demand from buyers hasn’t been met by a flurry of new properties coming on to the market, and this imbalance could keep prices high in the coming months.
If you’d like to discuss your property options or arrange a free valuation on your property, call your local Michael Jones office and we’ll match you with your dream home. Our team are ready to help you.
 Bank of England
Content accurate at time of publishing.