Are houses getting smaller? How much house do you get for your money

Throughout the Covid-19 pandemic the housing market boomed, with prices increasing by up to 10% compared to the previous year. But expensive homes are no new thing, as we find out by going back in time to see how much has changed. 

If you’re thinking of buying a house, you might want to look away now. If you're doing one up to sell, there’s never been a better time to stock up on the essentials. 

Average house prices have increased by 171% since 1980 

Back in 1980, the average house in England sold for £18,377. Compare that to 2020 when the average house went for £247,898, and you can see that things have changed a little. 

That 171% rise hasn’t been caused by inflation. If that’s all we were going on, houses today would cost on average £31,424. Instead it’s demand that has driven prices through the roof, with buyers willing to pay over the odds to land their dream home, and sellers (and estate agents) more than willing to cash in. 

Prices may be going up, but size is going down

Although house prices have skyrocketed in recent years, on the flip side, average house sizes have begun to shrink. Meaning you’re now getting less for your money in terms of square metre. In 1980, on average UK houses boasted 75 SQM of luxury space, but in 2020, on average houses are now a fraction of the size, at around 67 SQM. That's an average decrease of -18.61%, and if this continues, in just five years time, in England, we could be looking at houses as small as 65 SQM, going for upwards of £422,723.

Not only that, but on average, we’re paying £3,000 more per square foot as house prices have increased, meaning that we’re now actually paying £25,000 more for a house that we don’t have in terms of space.

But where have house prices gone up the most, and is there anywhere left that good value can be found?

Southend and Bristol have seen house prices soar over the past decade

House hunters in the south of the country have suffered the most, with property prices in both Southend and Bristol increasing by 68% since 2010. To rub salt even further into the wound, the amount of house you get for your money has actually decreased in each city, by -1% in Southend and -2% in Bristol. 

The cities have become attractive investment opportunities in recent years. Southend is a popular commuter city for workers in London, offering the practicalities of a big city with the sun of the seaside, while Bristol boasts three universities and a number of top employers such as Airbus, The Ministry of Defense and Rolls Royce. 

London living has increased by 67% in 10 years

It’s no surprise to see London high up on our list. The capital is famed for its extortionate property prices, with tiny apartments often going for millions of pounds. Between 2010 and 2020, house prices in the city went up by 67%, with big businesses and a highly competitive property market seeing demand for living space go higher than ever. 

You get 2% less property for your pound in London now than you did 10 years ago. 

Homes in Oxford cost 64% more than they did in 2010

Oxford benefits from being a popular commuter city for London workers, while also being home to a world famous university and picturesque architecture. If you want to enjoy that for yourself, be prepared to pay. House prices have gone up by 64% since 2010, although you do get a slightly bigger property for your money than you used to. What you do with that extra 1% space is up to you, if you’ve got any money left over. 

In some cities it’s not just the house price that’s going up - space is too, with bigger properties offering house buyers more opportunities to grow families and spread out. 

Cambridge performs the best for floor space. Between 2011 and 2018, average property sizes have increased by an impressive 10%, with new builds making the most of the city’s handy commuter links to enviable surroundings. 

Telford comes in second. The relatively new town (it was only built in the 1960s) is considered the birthplace of industry, with much of the country’s iron owing to the ore sites in its borders. Home sizes there have increased by 4% since 2011, as developers look to make the most of the rural land that makes up the area. 

Sunderland has also experienced a 4% increase in house size. The bustling northern city is bordered by Newcastle and Middlesbrough, making it a sought after proposition for property developers wanting to benefit from good transport links and employment opportunities. 

Which cities offer you the best value for money?

If you’re looking to get more for less, some cities give you good investment opportunities. While house prices have increased across the country, that doesn’t always mean you’re getting a bad deal, with certain areas providing substantial property growth without expecting you to break the bank. 

Blackpool could be the best area to buy in. Property sizes there are expected to increase by 3% by 2025, with prices only going up by 29% to £138,680 in the same time frame. 

Middlesbrough is second on our list, again offering a 3% increase in space. Properties there are only predicted to go up by 28%, but they’ll still cost a little more than in Blackpool at £145,446.

Sunderland completes our top three. While property space there will go up by 4%, you’ll have to pay for the privilege. House prices are predicted to increase by 34%, taking the average cost up to £158,861. 

Houses are predicted to keep getting smaller (and much more expensive)

The property market is showing no signs of slowing down. As previously mentioned, since 1980 houses in England have gone up in cost by 171%, in Scotland it’s 157%, while in Wales it’s 155%. But that’s nothing compared to how it’s predicted to boom in the next forty years. 

Average house prices in England are currently at £244,180, but in 2060 that figure could be as high as £422,723 - almost double the value.

Back in the 80s, you could buy 13 houses for today’s money in England, or 11 in Scotland and Wales. On the bright side, that’d be a lot of lightbulbs that would need replacing.

How can you benefit from the property boom?

The good news for you is that as house prices continue to go up, more people will be looking to find cheaper options that they can do up themselves. That’s where you’ll come in. Be sure to stay stocked up on all your electrical tools and consumables, so that when people need you, you’ll be ready to help turn a doer-upper into a dream home. 

Methodology 

House prices are going up and up, while the houses are getting smaller and smaller. Within the summary we looked at the decline in house sizes over the years and predicted the 2025 cost based on the rate of increase. We also calculated how many homes for the price of 1970 could you afford to buy at today's current prices, as well as how big (SQM) those houses would be. 293 cities across England and 54 across Scotland and Wales were broken down in blocks of five years to understand the inflation in prices per city as well as 2025 predictions. 

Sources:

https://www.centreforcities.org/reader/making-room/how-much-space-do-people-in-different-cities-have/

https://www.gov.uk/government/statistical-data-sets/uk-house-price-index-data-downloads-april-2021

https://www.which.co.uk/news/2018/04/shrinking-homes-the-average-british-house-20-smaller-than-in-1970s/

https://www.inflationtool.com/british-pound?amount=18376&year1=1980&year2=2020