House prices ‘have risen faster than earnings’

The long-term trend for house prices has shown that these have risen faster than earnings over the past half-century.

Such a finding was revealed in a study by Halifax of the cost of buying a home since 1959.

Over this period, the average house price has risen by 2.7 per cent per year, compared with a two per cent jump in earnings.

The largest increase in any decade was the 2000s, although this was one of four periods of large price jumps, each of which has been followed by a period of significant falls, the lender noted.

Such findings would suggest that those taking out mortgages will see their home value rise in the long term even if prices are flat this year.

The prospect of there being no overall change to asking prices in 2010 was predicted by property firm Rightmove earlier this week.

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