3 July 2013
As the Duke and Duchess of Cambridge prepare for the arrival of the next generation of Royals, including the reported £1 million refurbishment of their Kensington Palace apartments, current figures from Nationwide Building Society’s House Price Index show that average UK property prices have risen by 674% since 1982, when they were both born, leaping from £24,177 to £163,056.
Whilst the new Cambridge family are unlikely to be looking for a home on the open market anytime in the future, Nationwide’s figures show clearly the challenge many young families face getting onto the property ladder, and with significantly lower financial resources than the royal couple might have at their disposal.
In fact, house prices have soared in the last 30 years. When Prince William and Kate Middleton started St Andrews University in 2001 the average UK price was £91,049, so prices had increased by 276% since they were born in 1982.
When William and Kate first moved into a shared student house in Fife in September 2002, while average local properties cost £77,627, the average UK house price had increased to £110,830. By June 2010, when they had officially moved in together, to their Anglesey cottage close to Prince William’s RAF base, an average local property would have cost £141,419, whilst the price of the average UK home had risen to £168,719, a further increase of 52%.
The economic downturn of 2008 led to a fall in house prices, only picking up again around 2009. In more recent years average property values have remained broadly flat, so when the royal couple wed in Westminster Abbey on 29th April 2011, the point when the House of Cambridge really began, average prices were up at £166,764, a rise of 690% since 1982, though the first quarter of this year saw them fall slightly to £163,056.
Now, as the Duke and Duchess, and the entire country, prepare for a new heir to the throne, the question is, will house prices follow the same trajectory as they have since William and Kate were born? Whilst the Cambridges will not be concerned about local property prices, for other new families the cost of an average property in Westminster now stands at £725,754; way beyond the budget of many buyers.
Tracie Pearce, Head of Mortgages at Nationwide, said, "Despite the recent dip, house prices edged up slightly in May, providing further support for the view that the housing market is gradually regaining momentum.
"When viewed in retrospect, the increase in average property price between significant events in the making of the House of Cambridge has been extremely positive.
"Who knows, first signs of growth in the economy, low interest rates and increasing availability of credit, may all combine with the growing excitement associated with the birth of the new member of the royal family, to encourage further growth in the average price of the nation’s greatest assets; their homes!"
Notes to editors:
Nationwide is the world's largest building society as well as the second largest savings provider and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers.
Customers can manage their finances in a branch, on the telephone, internet and post. The Society has around 16,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.
About Nationwide House Price Index:
Indices and average prices are produced using Nationwide's updated mix adjusted House Price Methodology which was introduced with effect from the first quarter of 1995. The data is drawn from Nationwide’s house purchase mortgage lending at the post survey approvals stage.
Price indices are seasonally adjusted using the US Bureau of the Census X12 method. Currently the calculations are based on a monthly data series starting from January 1991. Figures are recalculated each month which may result in revisions to historical data.
The Nationwide Monthly House Price Index is prepared from information which we believe is collated with care, but no representation is made as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the whole or any part of the Index at any time, for regulatory or other reasons. Persons seeking to place reliance on the Index for their own or third party commercial purposes do so entirely at their own risk. All changes are nominal and do not allow for inflation.
More information on the house price index methodology along with time series data and archives of housing research can be found at www.nationwide.co.uk/hpi