The Halifax has released a new report this week which suggests that houses are less affordable than 50 years ago, but the quality of the homes available has improved. 

The lender, now owned by Lloyds Banking Group, said that over the last five decades UK house prices have risen by 2.7% a year, allowing for inflation. This was above the 2% annual increase in real earnings over the same period.  

Prices increased the most in the last decade. 

The Halifax study considered the state of the market in the half century from 1959 to 2009, believing that the last 50 years have witnessed some remarkable developments in the UK housing market. 

The Thatcher government’s Right to Buy policy, instigated in the 1980s, brought about one of the most significant shifts in the market. 

Because of this policy, owner-occupation in the UK accelerated the most in the 1980s. The Halifax figures show that 43% of homes were owned by their residents in 1961 compared with 68% in 2008.  

Privately rented homes fell from 33% to 14% over the same period, although it has crept up in the last 20 years or so, probably owing to the increase in student numbers.  

Four big house price booms have occurred in the last 50 years, the research concluded. They were: 1971-73, 1977-80, 1985-89, and 1998-2007.  

Over the last 50 years, the biggest rise in prices was in greater London, whereas the smallest increase was in Scotland. This might have been mitigated, to a degree, by an increase in homes with two incomes rather than just one.  

In a sign that buyers might be getting more for their money now, the proportion of households without an inside toilet fell from 14% in 1960 to 0.2% in 1996.  

A basic hot water supply features in all homes, unlike 22% of them in 1967, and central heating has also become the norm.  

House-building levels have fallen, but the proportion of households that were occupied by just one person rose from 19% in 1971 to 33% in 2009, the Halifax said. This is likely to have added to pressure on affordability of smaller homes for first-time buyers. The Council of Mortgage Lenders (CML) has said that the proportion of the average first-time borrower’s income spent on mortgage interest payments dropped in November 2009 to its lowest level for six years, at 14.4%.  

However, the deposit demanded by lenders remained high - typically at 25%.  

The requirement for large deposits is likely to continue to constrain the market, particularly first-time buyers, for some time to come.

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