The £10 pint and £1,448 duvet: What would things cost if they had risen with house price inflation?

How to beat the cost of inflation and get on the property ladder according to mortgage experts..

Amidst the turbulent climate of the last year and a half, UK house prices have continued to soar, experiencing their fastest growth for more than a decade. After a price increase of 8.9% over the last year, the average property in the UK is currently valued at £254,624, a huge 5,704% increase from fifty years ago, when the average home set UK buyers back by £4,387.

To put this into perspective, mortgage experts at the UK’s first app-based bank, Atom bank, have conducted research into what everyday essentials would cost today if they had followed the same steep inflation path as property prices, from a £66 game of Monopoly to a £1,448 duvet.

Food & drink

If the cost of beer had increased at the same rate as property inflation, we’d now be looking at the average pint costing us a hefty £9.29, almost two and a half times more than the actual average cost of £3.86. 

A pint of milk would cost us almost seven times more than it currently does, coming out at £2.90 per pint. Meanwhile, oranges and bananas would cost us £8.70 and £9.29 per KG respectively, meaning that oranges would be a massive twenty six times more expensive than they currently are, with bananas almost twelve times as pricey as they are today. 

Home & living

The shocking comparisons don’t stop with our groceries. The average gallon of petrol would cost us £19.73 (compared to the current £5 average), whilst a standard version of the beloved board game, Monopoly, would come in at a budget-busting £66.75, over three times its current price tag of £20. 

Perhaps most shockingly of all, if the average double duvet had followed the same trajectory as property prices, it would now cost us a budget-busting £1,448 – over thirty six times more than the current average price of £40!

So, how does this stack up against the average salary?

The average salary in 1971 stood at £1,664 and although today’s current average salary of £29,600 may seem like a fair increase, if wages had followed the same path as the property market, the average Brit would currently be earning a very comfortable £96,579 – over three times the actual average. 

The vast disparity between property and wage inflation means that back in 1971, the average worker needed to save less than three years of their annual salary to be able to afford to buy a home. Comparatively, in 2021, the average buyer needs to save over eight times their annual salary to purchase a home. 

Why are property prices so inflated?

With this in mind, securing a mortgage in the current buoyant property market can seem like a daunting task but there is hope and help on hand. 

Paul Elliot, Head of Mortgages, at Atom bank comments: “Demand for property is at an all time high with the pandemic making many of us reassess our priorities and put more value on things such as outdoor space and room for a home office. The rise of flexible and hybrid working has also led to cross-country movement as more people are moving out of the city now they aren’t tied to commuting into an office everyday. 

“The market’s inability to meet supply has led to property price increases with housing prices at a record peak. As the stamp duty holiday peters out, the initial urgency that was present will naturally slow, leading to a reduction in the unprecedented growth experienced.”

How can Brits beat the cost of inflation and get on the property ladder in 2021?

For those on a mission to buy a home in 2021, Paul provides his top tips to successfully moving home right now, whether you’re a first time buyer or looking to move onto pastures new. 

  1. Get your budget in order

Paul comments: “Before considering moving home or buying your first home, it’s crucial to work out what your budget is, taking into account the deposit you will need alongside extra costs, from solicitors fees to van hire. 

“Even in the current property market, it is absolutely possible to get on the property ladder with the right management of your finances. Start by creating a budget planner to keep track of your outstanding financial commitments and your disposable income:  the more you know about your outgoings, the more control you can have over your finances, meaning you can save for a deposit more efficiently.” 

  • Make the most of the help you can get

Paul advises: “If you’re keen to get on the property ladder or make a move at this time, look out for banks like Atom that offer a range of mortgage products for different buyers such as 95% and 90% LTV mortgages. We also offer less-than-perfect-credit mortgages for those who are concerned about their credit history. Make sure to research the different products on offer to choose the right route for your personal circumstances.”

  • Get yourself in the best possible position before you start searching

Paul adds: “In the current saturated market, making yourself as appealing a buyer as possible is paramount. We all have different advantages as buyers so make sure you’re aware of yours so you can sell yourself in the best light. 

“For example, if you’re not part of a chain, a seller who wants to move quickly may be open to a lower offer for the added convenience your position will afford them.”

  • Do your research before making an offer

Paul comments: “If you’re serious about making an offer, find out what similar properties in the local area have sold for in the past year or so to understand what would be a reasonable price to offer. 

“Make sure to also ask the estate agent about the seller’s unique situation as you may be able to use this to your advantage. For instance, if the house has been on the market for some time, they may be willing to accept a lower offer.”

  • Expand your search

Paul suggests: “Many of us have a dream neighbourhood in mind but often the reality of a sought-after location means inflated house prices for less square footage. 

“If you are serious about buying a property but priced out of your dream location, look at the surrounding areas that could be up-and-coming or offer similar benefits. From transport links to green spaces nearby, identify what features matter to you the most and remain open minded to finding them in areas you might not have explored before.” 

For more information on how Atom bank are helping more to move, visit: https://www.atombank.co.uk/mortgages 

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