13/09/2026
UK House Prices are £42,525 cheaper than 2007!
Woah!, Is that a typo? No, its not, let me explain
At first glance, UK house prices are more expensive than they were before the financial crisis 2008. The average UK home cost £184,131 in 2007. Today, it is £278,784, an increase of £94,653, or 51.4%. So, why are they 51.4% cheaper?
You see there is a problem with comparing the headline average price of 2007 vs 2026 average price directly.
A pound in 2007 had considerably more purchasing power than a pound does today. An another way to think about it is thinking about the humble Cadbury’s Freddo. Back in 2007, £1 could buy roughly six. Today, the same pound buys closer to two and a half. It is still £1, but what that pound can buy has changed.
Once inflation is taken into account, that £184,131 average UK house price from 2007 is equivalent to approximately £321,309 in today’s money. Against today’s actual average price of £278,784, that means UK house prices are around £42,525 lower, or 13.2% cheaper in real terms.
Both statements are true. House prices have risen sharply in actual pounds and pence, yet they have fallen once the changing value of money is taken into account.
That does not mean buying a home today is easy. Deposits, mortgage repayments and household costs remain significant pressures. But it does mean the claim that homes are simply “far more expensive than they used to be” deserves more context.
In the week, I will be publishing a blog article looking specifically at Nottingham, examining exactly what has happened to local house prices since 2007, both in headline, or nominal, terms and in REAL, inflation adjusted terms.
