Who was better off?

Who was better off in London comparing years 2017 to 1995.

Showing values based on RPI, CPI and Average Salary indexes.

FlatOn average you would need a minimum £111,881 salary in 2017.
In 1995 you would need (converted to 2017 money) £30,744.
The mortgage payment would be around £2,168 in 2017.
In 1995, the mortgage payment would be around £1,129 (in 2017 money).

TerracedOn average you would need a minimum £139,772 salary in 2017.
In 1995 you would need (converted to 2017 money) £37,798.
The mortgage payment would be around £2,709 in 2017.
In 1995, the mortgage payment would be around £1,388 (in 2017 money).

Semi-DetachedOn average you would need a minimum £138,193 salary in 2017.
In 1995 you would need (converted to 2017 money) £41,688.
The mortgage payment would be around £2,678 in 2017.
In 1995, the mortgage payment would be around £1,530 (in 2017 money).

DetachedOn average you would need a minimum £221,773 salary in 2017.
In 1995 you would need (converted to 2017 money) £77,573.
The mortgage payment would be around £4,298 in 2017.
In 1995, the mortgage payment would be around £2,848 (in 2017 money).

Below is a table showing the average sold prices in 2017 and 1995 in London, London.

Property Type Price in 2017 2017 Price in 1995 Money Price in 1995 1995 Price in 2017 Money
Flat £526,498 £289,642 RPI £79,591 £144,677 RPI
Terraced £657,750 £361,847 RPI £97,854 £177,874 RPI
Semi-Detached £650,319 £357,759 RPI £107,923 £196,178 RPI
Detached £1,043,639 £574,136 RPI £200,824 £365,049 RPI

Below is a table showing the average mortgage costs in 2017 and 1995 in London, London. These are based on a 85 percent loan to value mortgage using the actual interest rates in the respective years.

Property Type Repayment 2017 2017 repayment in 1995 Money Repayment in 1995 1995 repayment in 2017 Money Interest Only 2017 2017 interest only in 1995 Money Interest Only in 1995 1995 interest only in 2017 Money
Flat £2,168 at 1.75% £1,193 RPI £621 at 8.125% £1,129 RPI £768 at 1.75% £422 RPI £539 at 8.125% £980 RPI
Terraced £2,709 at 1.75% £1,490 RPI £763 at 8.125% £1,388 RPI £959 at 1.75% £528 RPI £663 at 8.125% £1,204 RPI
Semi-Detached £2,678 at 1.75% £1,473 RPI £842 at 8.125% £1,530 RPI £948 at 1.75% £522 RPI £731 at 8.125% £1,328 RPI
Detached £4,298 at 1.75% £2,364 RPI £1,567 at 8.125% £2,848 RPI £1,522 at 1.75% £837 RPI £1,360 at 8.125% £2,472 RPI

Here are the minimum salaries required to buy an average property in 2017 and 1995 in London, London.

Property Type Average salary required in 2017 2017 average salary required in 1995 Money Average salary required in 1995 1995 average salary required in 2017 Money
Flat £111,881 £61,549 RPI £16,913 £30,744 RPI
Terraced £139,772 £76,892 RPI £20,794 £37,798 RPI
Semi-Detached £138,193 £76,024 RPI £22,934 £41,688 RPI
Detached £221,773 £122,004 RPI £42,675 £77,573 RPI

Here are the estimated costs of some common products in 2017 and 1995 money.

Product In 2017 Money (RPI) In 1995 Money (RPI)
Beer £2.83 £1.56
Milk (1l) £0.73 £0.40
Bread £0.79 £0.44
Chicken Breast (1kg) £4.58 £2.52
Bottled Water (1.5l) £0.77 £0.42
Petrol Gallon (4.54l) £4.59 £2.52
Small Hatchback Car £14,539.90 £7,998.81

Using a combination of Land Registry sold house price data spanning over 20 years, Office of National Statistics RPI (Retail Price Index) data and the Bank of England's records on mortgage rates we have produced this tool to pit to years against each other to see if people are really better off.

By selecting a city and choosing to years to compare we will find the average prices for the various property types, find the relative mortgage cost in the relevant year, extract household income and cost of living data - then - adjust for inflation to show the real costs to make comparison easy!

It is a common argument that it was easier for people to get on the housing ladder in the past. For example people graduating in the since 2003 would find it more difficult to get on the property ladder compared to someone graduating in 1995.

We can test this theory by checking what the price of a first-time buyer's likely purchase would be, the interest rate, the mortgage payment from 1995 and from 2003. Taking it one step further we can using our inflation calculator to convert those prices using RPI data so the numbers are more meaningful as they can be directly compared.

So, let's take London as an example and compare 1995 with 2003.

The result produced shows that in 1995 an average £17,000 salary is needed to by the average flat. However, in 2003 you would need £38,000. This means just over double the salary is required to get on the housing ladder on average in London is a span of eight years.

Looking further, the average mortgage payment in 1995 for a first-time buyer in London would be £625. In 2003, the mortgage payment would be £1,064. So, even though interest rates did reduce (from 8 percent to 5 percent) the monthly payment is still nearly doubled.

This tool can create comparisons such as this for hundreds of the UK's towns and cities and for any year spanning from 1995 to the current year.

You can get started above or try some of the examples below:

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