Over the past number of days, weeks, months, years and even decades, the UK has been obsessed with property prices and their never-ending rise.
Harold Wilson won the general election with Labour back in 1974, and since that that day property prices in the UK have seen an average rise of 1,879 per cent. In 1974 the average property price was just under £10,000 and this has risen to more than £185,000 in 2014. Wages have also increased during this time – from £32 to £517 for an average weekly wage – but the gap between wages and property prices has also grown.
It is possible to match property prices against a number of other costs over the past 40 years to show it is not just property that has seen an extreme jump in price.
Cinema tickets have seen a 2,133 per cent rise – the average price these days is £6.53, according to independent research, but it is hard to find an adult ticket costing less than £9.40. If you look at central London ticket prices of £15 in Leicester Square, the increase could be as high as 3,444 per cent.
Going to the cinema is now an expensive business for most, which is why attendance numbers are dropping thanks to the massive shift into the digital world. A comparison is often made between the rise of digital within the movie industry and what we are going to see happen to the housing market over the next couple of years. It was not many years ago that you would have visited your local Blockbusters shop to hire your video for the night. However, those days are long gone. You are now more likely to download and watch a film via your Sky box or Netflix account.
It is 40 years ago this November that McDonald’s opened its first restaurant in the UK. Back in 1974 a BigMac would have cost customers at its first UK restaurant in Woolwich, London, 40 pence. These days a BigMac will set you back £2.69 – a rise of 673 per cent. Another food item, Mars Bars have seen prices increase more than 1,300 per cent, although the size of the bar has slimmed down.
Ford launched the now-iconic Escort Mark II around the same time in the 1970s with a £1,299 price tag. These days a Ford Focus hatchback would cost you £13,995 – a rise of 1,077 per cent, bringing it to tenth place in the table. However, you would not have had many gizmos in your Mark II Escort. These days Ford has invested heavily into technology for its new cars and has pioneered Ford Sync to meet consumer demand, allowing car owners to use their phone as an entertainment hub, to listen to their music via popular streaming sites such as Spotify.
A pint of lager at your local pub was 20p, a far cry from today’s average of £3.19. Back then you could also smoke in the pub and a pack of 20 cigarettes was 20p. Cigarette sales peaked in 1974 and since then have seen an enormous amount of taxation and with an increase of 4,370 per cent on the price, bringing cigarettes to the top of the price league table.
Equally, due to a decline in newspaper print advertising as news has moved online, the Daily Mail’s printed version has gone up 3,000 per cent in the past 40 years, despite having the world’s best-read online news website.
In the mid 1970s children were about to witness a technical revolution as Atari launched its iconic pong game. Jump forward 40 years and prices for games console such as the PS2 have grown by 574 per cent. And for most people the console is not enough these days – they want to be able to play other gamers from all over the world via online channels.
Back in 1974, many people simply could not afford holidays abroad, and long-haul flights were more of an expense. With fierce competition in the aviation industry over the past four decades, prices for flights have only grown by a modest 482 per cent. No one back in the 1970s would have ever thought you could book a seat on a plane to Europe for the equivalent of £1. Low-cost airlines have developed an industry that offers both a first-class service at a very low price.
So seen in this context, the rise in property prices is actually more in line with that of other goods. And though the cost of selling a house has soared – in 1974 it cost £100 to sell the average £10,000 home, but today costs in the five figures for an average £186,000 home through an estate agent – homeowners are now in a great position to sell their home through low-cost internet sites.
Technology and the internet may well continue to help mitigate and rein in the rising costs of goods as consumers expect better service at good value.
Russell Quirk is chief executive of eMoov.co.uk
Key points
Since 1974 property prices in the UK have seen an average rise of 1,879 per cent.
Going to the cinema is now an expensive business for most, which is why attendance numbers are dropping thanks to the massive shift to the digital world.
In the 1970s a pint of lager at your local pub was 20p, a far cry from today’s average of £3.19.