The past 50 years have seen an extraordinary transformation in house prices, making today’s market far more challenging for first-time buyers compared to 1974.
Research by mortgage brokers Mojo Mortgages reveals the growing disparity between property costs and income growth, illustrating why homeownership is tougher now than it has been in decades.
Despite this, the findings also revealed those looking at buying a house are not being deterred with the number of first-time buyers rising year-on-year.
1974 vs 2024: A look at house prices
Research from Mojo Mortgages reveals the startling changes in house prices seen over the last 50 years in the UK.
Their findings for average house prices show that:
In 1974, the typical home cost £10,027. By 2024, this figure skyrocketed to £265,012 – an increase of 2,534%.
While household income has risen from £3,567 to £67,288, a 1,791% increase, it lags far behind the growth in house prices.
The average deposit required has climbed from £537 in 1974 to an astonishing £58,303 in 2024, a 10,757% increase.
“With house prices growing faster than salaries, affordability has become a major issue,” explained John Fraser-Tucker, Head of Mortgages at Mojo Mortgages. “If home prices had kept pace with income, the average property would cost around £189,100 today – a whopping £75,912 less than the current reality.”
John Fraser-Tucker
John has over 20 years of experience in the financial services sector as well as extensive knowledge of mortgage products. He also previously worked as a Mortgage Advisor and Business Development Consultant.
House prices demand longer savings
House price rises in the last 50 years mean first-time buyers will on average have to wait till their 30s to get on the property ladder(Image credit: Getty Images)
The dramatic rise in house prices has profoundly impacted saving for a deposit. In 1974, couples needed only three months of saving 20% of their income to afford the average deposit.
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Today, the same effort would take over 11 years and 3 months, with deposits now equaling 22% of a home’s value compared to just 5% in 1974.
“As deposits ballooned from 15% to 86% of joint salaries over the decades, the timeline to save has expanded dramatically,” said Fraser-Tucker. “It’s no surprise that buyers today are waiting longer to step onto the property ladder.”
This has also increased the average first-time buyer age from 26 in 1974 to 33 years and 8 months in 2024, reflecting the additional time required to save for a home in the face of surging house prices.
Despite these challenges, Mojo Mortgages reports a 21% increase in first-time buyer activity in 2024 compared to 2023.
Many buyers are turning to shared ownership, family assistance, and government programs to offset the pressures of rising house prices.
“Today’s buyers are demonstrating remarkable resilience in navigating an undeniably tougher market,” Fraser-Tucker noted. “Although house prices have climbed dramatically, the dream of homeownership is still alive.”
The last 50 years have redefined the housing market, with house prices rising far beyond income growth and affordability.
However, the determination of today’s buyers shows that, while the journey may be harder, homeownership remains achievable.
As Fraser-Tucker concluded, “With the right tools and support, today’s first-time buyers can still find their way onto the property ladder, even in the face of record-breaking house prices.”
News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.
