Writing in praise of this year’s Glastonbury on the letters page of my morning newspaper, an 82-year-old reader spoke also of “the sheer joy and exuberance of Coldplay’s performance”, noting that “Music can have an impact upon people’s happiness and wellbeing that transcends the bleak outlook we continue to face.”
He’s right: a number of other artists, including Dua Lipa and Lulu, did exactly the same, bringing great joy to Glasto’s live audience as well as to the many millions watching at home. The weather certainly helped this year, ensuring that campers had no need to trudge through acres of mud in wellies and pyjamas just to reach the shower blocks.
A few days after Glastonbury ended and thousands of folks made their way home (why do so many people leave their tents behind?), the latest house price statistics revealed that far from going backwards, as one or two performers did in Somerset, the UK property market continues to show remarkable resilience, reinforcing Britons’ long-standing love affair with bricks and mortar and explaining our devotion to the sector, at least in part.
This prompted some research (see Fig 1 below) which suggests that regardless of what type of music tops the charts, property continues to perform like a genuine A-lister, perfectly capable of headlining on Glastonbury’s Pyramid Stage.
Space limitations meant I couldn’t include every year’s best-selling record since the early 1950s (detailed property figures go back to 1952), but the average 10-year rise in value is music to the ears of homeowners.
Fig 1
What was number one when you bought your home?
| Year | Av house price | Best-selling single | Artist |
|---|---|---|---|
| 1953 | £1,891 | I Believe | Frankie Laine |
| 1963 | £2,673 | She Loves You | The Beatles |
| 1973 | £9,767 | Tie a Yellow Ribbon | Tony Orland & Dawn |
| 1983 | £28,623 | Karma Chameleon | Culture Club |
| 1993 | £51,050 | I’d do anything for love | Meatloaf |
| 2003 | £133,903 | Where Is Love? | Black-Eyed Peas |
| 2013 | £174,444 | Blurred Lines | Robin Thicke |
| 2023 | £286,489 | Flowers | Miley Cyrus |
It’s worth noting that even during the relatively low-growth decade which began in 2009, average UK property prices rose by more than 40%.
Incidentally, had you deposited £100 in a bank savings account in 2009 and assuming (optimistically) that you could have received an average of 2.5% interest over the following decade, it would today be worth £138.77. Contrast this miserable return with figures supplied by Nationwide which show that a house you could buy a decade ago for £167,000 would, by mid-2023, set you back more than £286,000 (See Fig 2). Moreover, irrespective of which top-flight football team brought ‘endless joy’ to its supporters by winning the Premier League over the past decade, fans of the property market will be aware that it too keeps chugging along.
Fig 2
Average UK house prices 2013 – 2023
| Year | Average Value | Premier League Winners |
|---|---|---|
| 2013 | £167,294 | Man Utd |
| 2014 | £186,544 | Man City |
| 2015 | £194,258 | Chelsea |
| 2016 | £204,238 | Leicester City |
| 2017 | £209,971 | Chelsea |
| 2018 | £214,578 | Man City |
| 2019 | £215,910 | Man City |
| 2020 | £237,834 | Liverpool |
| 2021 | £265,668 | Man City |
| 2022 | £286,397 | Man City |
| 2023 | £286,489 | Man City |
Though the property market can take a short-term buffeting, on occasion it can also get its skates on. Four periods in particular stand out when values soared by an average of 77% over a minimum of 30 months (See Fig 3).
Fig 3
When the property market motors
| Period | Change in property values | % increase | Consecutive months of growth |
|---|---|---|---|
| Q2 1971 to Q3 1974 | £4,909 to £10,148 | 106.7% | 42 |
| Q1 1978 to Q3 1980 | £13,820 to £23,628 | 70.9% | 33 |
| Q3 1986 to Q3 1989 | Q3 1986 to Q3 1989 | 64.1% | 39 |
| Q3 2001 to Q4 2004 | £91,049 to £152,464 | 67.4% | 42 |
Of course, we do not often see jaw-dropping price rises of this magnitude, although who could rule out another surge in value should interest rates start coming down at the end of the year as they’re predicted to do?
While statistics and graphs make for interesting reading, many people wonder how they can make their home’s inherent wealth work for them. It’s all well and good owning a property that has risen steadily in value, but is it possible to access the wealth built up over many years?
The short answer is ‘yes’.
Consider the array of facts and statistics above because if your home has increased in value over the years, it could provide additional capital with which to supplement your existing income. Thousands of older UK homeowners are doing something similar every month, ie, unlocking the wealth built up in their home, usually over many years, and using it to improve their level of disposable income.
Converting the equity in your home into tax-free cash allows you to improve your standard of living, or top-up income generated from pensions or under-performing investments. Importantly, however, the money is yours to spend as you wish. The most popular use of this tax-free cash is to fund home improvements. Many people just fancy a new bathroom or kitchen, while others convert their homes into social hubs by adding a conservatory for visits by family and friends.
Not surprisingly, plenty of people release equity to finally rid themselves of the burden of an interest-only mortgage, while a significant percentage buy ‘big-ticket’ items such as a new car, or treat themselves to a luxury holiday.
An increasing number of older homeowners, delighted at how their hard work has enabled them to buy and invariably improve their homes, thereby enhancing their property’s value, release funds in order to support loved ones by giving them a hand onto the property ladder. If property values are scheduled to sustain their remarkable growth in value over the coming years, why shouldn’t their children benefit too?
It’s probable that by using a percentage of your ‘paper’ wealth now, there’s likely to be less available in your estate when to comes to leaving an inheritance. Furthermore, releasing equity could also affect your entitlement to means-tested state benefits.
Clearly, your home’s value can become more than ‘paper wealth’ and the array of possible uses to which tax-free equity released from your property can be applied is as broad as you want it to be. In the first instance, having a word with a fully qualified equity release adviser makes good sense; after all, if you want to release some of your property’s accumulated wealth, you want to ensure you’re doing it properly and having a beneficial impact upon your own or other people’s happiness and wellbeing.
