Buying a home costs four times as much as it did half a century ago in real terms, according to research by Halifax.

Average house prices, allowing for inflation, have increased 273 per cent in the past 50 years, making homes increasingly unaffordable.

A typical home could be bought for £2,507 in 1959, the equivalent to £43,713 in today’s money.

But home buyers are actually paying significantly more to buy an equivalent property now, needing £162,085.

Despite the recent housing slump, prices rose the most during the last decade with a real rise of 62 per cent, Halifax said.

It is slightly ahead of the 61 per cent increase during the 1980s and significantly higher than the 22 per cent drop during the 1990s, the worst decade for house prices.

Despite the price increases during the past four decades, Britain’s fondness for home-ownership has gone from strength to strength, rising from 43 per cent in 1961 to 68 per cent in 2008.

Martin Ellis, housing economist at Halifax, said there has been a significant shift towards buying a home with the majority of households now living in their own homes rather than renting.

The proportion of single person households in England has jumped from less than one in five households in 1971 to one in three in 2009.

He added: “There have been substantial changes in both the number of households and their composition; the typical household now is very different to 50 years ago.”

In 1960, 14 per cent of homes did not have an inside toilet but by 1996 this had decreased to 0.2 per cent.

Just over a fifth of households were without a basic hot water supply in 1967, but this had dropped to 1 per cent by 1991, while central heating in British homes increased from just 35 per cent in 1971 to 92 per cent in 2000.

The number of married households is down by almost a fifth since the 1970s, although these are still the most common type, while the number of co-habiting couple households has increased from 1 per cent in 1971 to 11 per cent in 2009.

http://www.workfromhomeinuk.com/

http://www.telegraph.co.uk/finance/personalfinance/

Commercial property values rose by 3pc in December, the highest monthly gain since records began, according to the IPD.

The final month of last year delivered the largest monthly capital growth in IPD’s 23-year history, at 3pc, according to December’s IPD UK Monthly Index.

The figure beats the 2.9pc delivered exactly 16 years earlier in December 1993, at the end of the last major property recession.

The fifth-consecutive monthly gain, which amounted to a compounded growth of 8.8pc, was sufficient to lift returns on UK commercial property into positive territory for the calendar year. In the first IPD indication of the year, UK commercial property annual total returns for 2009 were 2.2pc, while capital growth was -5.6pc.

At the sector level, the most recession-sensitive sector, offices, began its recovery latest. Capital values fell by 14pc over the first eight months of the year but then recovered – the sector was down 8.4pc over the 12 moths. In the retail sector, over the first six months of 2009 capital growth also fell by 14pc but ended the year down by just 4.3pc.

The Industrial sector’s initial capital depreciation last year was the shallowest, at minus 11pc over the seven months to July, before a compounded 7.3pc capital growth over the final five months to end the year at minus 4.5pc.

Investors have been returning to the sector in recent months off the back of the sector’s recovery.

Aviva has just raised more than £200m for its UK Real Estate Recovery Fund, which will invest in British commercial real estate over a five-year period.

Since the fund’s launch at end-November 2009, it has bought three properties, with two more due to be acquired soon, adding up to about £50m in investments so far, the company said in a statement.

“The fund’s strategy is to acquire lower-risk assets that are let to strong covenants on long leases in sectors and sub-sectors that we forecast to be top performers,” said fund manager Rob Walton.

http://www.telegraph.co.uk/finance/personalfinance/investing/

Vouchers worth £400 that go towards the cost of a new energy-efficient boiler under the scrappage scheme will be issued on January 18.

The Government announched the scrappage scheme which encourages people to ditch their for old boiler for a new one in the pre-Budget report. It hopes the scheme will help cut CO2 emmissons – domestic heating accounts for 14 per cent of the UK’s CO2 emissions.

New boilers have rated efficiencies of 90 per cent or more meaning that they use less fuel, resulting in lower CO2 emissions and running costs. Renewable heat technologies do not use fossil fuels, reducing CO2 emissions still further.

By upgrading your G-rated boiler to an A-rated one, your household heating bill should drop by about a quarter – a saving, on average, of around £235 a year.

People who apply to the scheme will receive their voucher on or after January 18.

The Energy Saving Trust says that a good quick test for gas boilers is to see if it has a permanent pilot light -if it has then it is very likely to be a G-rated boiler. If it is gas fired and over fifteen years old it is likely to be eligible. If it is oil fired and over twenty five years old, it is likely to be eligible.

For a better idea, see if your boiler make and model is listed as G-rated or worse by clicking here .

The £50m scheme, which will benefit only people living in England, is likely to be funded entirely by the taxpayer.

Will Marples, an energy expert at uSwitch.com, the price comparison service, said: “Heating and hot water account for £756 a year on average so it makes absolute sense to focus energy efficiency efforts here, where people have the most to gain. Installing a modern efficient boiler can save up to £235 a year on heating bills.

“However, for many families and households the cost of buying one and having it installed is prohibitive. Hopefully this new scrappage scheme will put it within reach of more people.”

http://www.telegraph.co.uk/finance/personalfinance/consumertips/household-bills/

Banks and building societies insist they are lending again, but latest figures suggest home buyers are facing a different reality.

Three quarters of home buyers said it was as difficult or harder to find an affordable mortgage in the last three months of the year, compared to the previous three months.

The figure is up 2 per cent, from 73 per cent, for the three earlier months, according to property website Zoopla.co.uk.

It comes despite high street banks receiving billions of pounds of financial support after the economy faced a meltdown.

Nicholas Leeming, Commercial Director of Zoopla.co.uk, said: “This time last year, confidence in the property market was at rock bottom and the outlook was bleak. But, a year is a long time in the housing market and, while the recovery is still in its infancy, optimism is now back to levels not seen since the credit crunch began in 2007.

“The shortage of homes for sale has prevented any improvement in transaction levels over recent months but with increased confidence among owners about putting their homes on the market to match the pent-up demand from buyers, we could see a welcome boost to the recovery of the housing market.”

http://www.telegraph.co.uk/finance/personalfinance/

British house prices have ended the decade 117pc higher, according to the Nationwide.

The performance over the Noughties was the strongest on record for British house prices in spite of the woes of 2008, the building society said.

Even with inflation taken into account, the average home increased by 68pc in value compared with a 14pc fall in real terms in the 1990s.

Over the past decade, Wales notched up the biggest rise in house values, with an 82pc hike in real terms, after inflation. England saw the weakest growth in the noughties after prices increased by 65pc.

Nationwide’s latest survey of house prices showed house prices rose by 5.9pc in 2009 as the UK property market bounced back from last year’s double digit declines.

The average cost of a UK home rose by another 0.4pc in December to £162,103, marking the eighth straight month of price increases.

The performance in 2009 is a surprise turnaround on the 15.9pc plunge in 2008 and comes despite the worst recession in the UK since the Second World War.

Martin Gahbauer, Nationwide’s chief economist, said the increase in house prices this year “surprised most commentators”.

“Few could have foreseen this development at the start of the year, when the near term price trend was still pointing to a repeat of the double digit annual decline experienced in 2008,” he said.

“Although house prices are still 12.2pc lower than their October 2007 cyclical peak, they have now rebounded by an impressive 8.9pc since their February 2009 trough.”

But the picture for 2010 is unclear, with a recent slowdown in price rises raising concerns over the sustainability of the market recovery.

December’s 0.4pc rise is significantly below rises of up to 1.4pc recorded in the summer.

Three month-on-three month growth rates – generally considered to be a smoother indicator of the underlying trend – also eased during December to 2.1pc from 2.8pc in November.

The past year was buoyed by “pent-up demand” as cash buyers not restrained by the credit drought entered the market, Nationwide said. Record low interest rates, a smaller-than-feared increase in unemployment together with recent stabilisation in the banking sector and signs of an economic recovery also acted as a boost.

While interest rates are expected to remain low well into 2009, there is uncertainty over the labour market and whether cash buyers can continue to support housing demand.

Mr Gahbauer said: “This year’s recovery has to some extent been driven by transitory factors and there are reasons to believe that it will lose momentum over the coming year.

“At the same time, there is no obvious catalyst on the near-term horizon that would trigger significant renewed falls in prices. At this stage, therefore, it seems likely that 2010 will see no significant house price movements in either direction.”

The group’s figures show that London saw the strongest growth throughout 2009, with the average home in the capital now costing £276,088 – 7pc more than it did a year ago.

Northern Ireland was the worst performing region, with prices falling 6.7pc to £137,949.

Carlisle in Cumbria was the best performing of all the UK towns and cities in 2009, with prices soaring by 10pc to £136,666.

Leicester suffered opposite fortunes, with home prices down 9pc to £141,643.

http://www.telegraph.co.uk/finance/economics/houseprices/

House price affordability has started falling for the first time since the slump in property values, meaning that prices are now once again moving out of reach of the average buyer.

The affordability of UK property market has been falling since the middle of 2009, according to exclusive new research produced for The Sunday Telegraph by Lombard Street Research (LSR).

The survey shows that house prices have once again started outpacing the increase in the average family’s disposable income, meaning that the best opportunities for good value property have passed.

The findings would have seemed highly unlikely at the beginning of 2009, when house prices were tumbling and past experience suggested that it would take some years for the property market to find its feet again. However, the combination of record low interest rates and a series of Government programmes to support homeowners have helped prices to turn around far quicker than expected.

In a study to be published on Monday, the Centre for Economics and Business Research is expected to predict that house price growth will continue next year – albeit at a slower pace than in 2009, with property prices finishing the year between 2pc and 4pc higher than today. It will also predict that by the end of 2012, house prices will be around 15pc higher than today.

LSR’s housing affordability index, in which 100 points represents the average affordability level since the early 1960s and a lower figure means prices are more overvalued, dropped from 118.2 points to 117.9 in the third quarter of the year.

The fall is the first since the beginning of the housing correction in mid-2007, at which point the affordability index was at a nadir of 82.7.

According to experts, this suggests that the high point for affordability has now been and gone. The peak, in the second quarter of 2009, was not far shy of the 118.9 reached after the early 1990s property crash.

LSR economist Melissa Kidd said: “Affordability has now peaked. The major effect driving that is that house prices have risen quite quickly. Disposable income is up as well, while mortgage rates are low.”

LSR’s affordability index is different from other attempts to gauge the value of housing in comparison to people’s ability to pay for it.

Whereas others simply compare mortgage costs or gross incomes with prices, LSR’s index compares prices with definitive household disposable income and the monthly mortgage burden. The comparison is key to working out whether homes are of an accessible price or not, since fast-rising incomes can make property more affordable.

Nationwide and Halifax will next month confirm that house prices rose during 2009, turning around major falls to end the year higher than they began it.

Over the course of the entire housing correction, prices dropped by around a quarter. However, these overall figures mask significant variation from region to region.

In particular, the areas which have prospered most in the past year are those tied to occupations which have benefited from low interest rates and Government bail-outs – in particular the City.

As a result, prices in the more upmarket areas in London and the south east of England have risen far faster than most others this year although they suffered some of the sharpest falls the previous year.

Ms Kidd said: “We’ve had this huge boost to disposable income from low rates, but there’s not much to see what could drive prices much higher next year. We expect low single digits rises in prices in 2010.

“The problem is that it is difficult, because of the credit crunch, to get access to really cheap mortgages. Plus, there will be more stock coming on to the market which should reduce the pace of house price increases.

“That said, we are unlikely to see the scale of house price declines we did recently for some time.”

http://www.telegraph.co.uk/finance/economics/

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