The UK Housing Market: A Tale of Two Eras – 1970s vs 2025
The UK housing market has always reflected the times, shaped by changes in the economy, society, and government policy. In 2025, buyers face challenges very different from those in the 1970s, though some aspects remain surprisingly familiar.
The housing market in the UK has always reflected its times, shaped by economic conditions, societal changes, and government policies. Today, in 2025, prospective buyers face challenges that would have been unrecognisable to those buying homes in the 1970s. Yet, some underlying factors remain surprisingly similar.
The Housing Market in 2025: A Landscape of Challenges
Buying a home in 2025 is no small feat. A recent YouGov survey reveals that 80% of respondents believe it is harder for young people today to afford a home compared to the 1970s, and this perception is rooted in stark differences between the two eras.
One of the most glaring challenges is the house price-to-income ratio, which has skyrocketed over the years. In the 1970s, according to Nationwide the average house price was around 3.5 times the average salary, while today, it’s closer to 9.7 times the average salary.
while today, it’s closer to 9.7 times the average salary. Combine this with stricter lending criteria, where banks require higher deposits and perform tighter affordability checks, and the path to homeownership becomes a steep climb.
Additionally, the cost-of-living crisis has exacerbated the problem. Rising energy prices, stagnating wages, and inflation have left many with less disposable income to save for a deposit. For first-time buyers in Berkshire, Oxford, Guildford, or even Solihull, these challenges are universal.
Regional Comparisons in 2025
- Bracknell: Proximity to London keeps demand high, but house price growth in the region has slowed, increasing by just 3.2% over the past year according to ONS.
- Oxford: Known for its historic charm and university prestige, Oxford remains one of the most expensive cities outside London, with average house prices above £550,000 according to rightmove.
- Guildford: Strong transport links and excellent schools keep Guildford competitive. However, affordability remains an issue, with prices increasing moderately in 2025.
- Solihull: Situated in the West Midlands, Solihull benefits from its central location and growing appeal as a commuter hub. According to ONS data, house prices here have increased by 5.0% since October 2023, reflecting growth in the market.
The Housing Market in the 1970s: A Simpler Time?
Looking back, it’s tempting to see the 1970s as a golden era for homebuyers, but it wasn’t without its difficulties. The early 1970s were marked by a housing boom; according to Land Registry data, house prices doubled between 1971 and 1973, rising from £4,265 to £8,794 in just two years.
However, according to ONS data, the mid-1970s brought inflation rates averaging around 16% annually, peaking in 1975 at 24.2%, which eroded the value of wages. For buyers, this meant that while house prices in nominal terms were relatively low, the real cost of borrowing soared as interest rates climbed. By the late 1970s, many households were struggling to keep up with mortgage repayments as economic instability, including rising unemployment and industrial unrest, rocked the country.
According to ONS data, the mid-1970s saw inflation rates averaging around 16% annually, peaking at 24.2% in 1975, which significantly eroded the value of wages. For buyers, this meant that while house prices in nominal terms were relatively low, the real cost of borrowing soared as interest rates climbed. By the late 1970s, many households struggled to keep up with mortgage repayments as economic instability, marked by rising unemployment and industrial unrest, rocked the country.
Key Comparisons: 1970s vs 2025
- Affordability: While homes in the 1970s were cheaper relative to income, buyers had to contend with double-digit inflation and rising interest rates. Today, house prices are far less affordable, but inflation and interest rates are relatively stable.
- Government Policy: In the 1970s, policies such as rent controls and grants for new homeowners aimed to make housing accessible. In contrast, today’s buyers face changing stamp duty thresholds and a lack of government support, compounded by a significant housing shortage.
- Societal Norms: The 1970s were a time of growing homeownership aspirations, but there was less pressure to get onto the ladder early. In 2025, the narrative around homeownership is more urgent, with renting viewed as an expensive and less desirable option.
The Road Ahead for Buyers in 2025
Despite the challenges, there are glimmers of hope. Falling mortgage rates and steady wage growth are expected to improve affordability in the coming months (source: ukfinance). Additionally, areas like the Midlands offer more balanced markets compared to the South East.
The lack of housing supply remains a critical issue. With new builds dropping and space limited in high-demand areas like Oxford, policymakers must address the shortage to stabilise prices and improve housing accessibility. Oxford City Council highlights the challenges in meeting housing needs, emphasising the urgency of resolving this supply gap.
Conclusion
The journey to homeownership in the UK has always been shaped by the times. While buyers in 2025 face a unique set of challenges compared to those in the 1970s, the resilience and adaptability of the market provide hope for the future. Understanding these dynamics is key to making informed decisions in a rapidly evolving market.
Contact our team today for expert advice tailored to your needs, or explore our resources to help you make informed decisions in 2025’s evolving property market.