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How have home prices performed under recent Prime Ministers?

Tuesday 23rd April 2013

Following the recent death of Margaret Thatcher, it would be timely to assess how UK property prices have performed under recent Prime Ministers.

The table below, compiled by Knight Frank, based on Nationwide data, shows the extent to which residential property prices in the UK appreciated during each premiership, it also calculates the average annual percentage change.

UK house prices by Prime Minister

 

Total change vs average annual % change

 

Prime Minister

From

To

UK

UK

% change

average annual % change

Anthony Eden

Q2 1955

Q1 1957

4.3%

2.5%

Harold Macmillan

Q1 1957

Q4 1963

45.6%

6.8%

Alec Douglas-Home

Q4 1963

Q4 1964

8.2%

8.2%

Harold Wilson

Q4 1964

Q2 1970

39.8%

7.2%

Edward Heath

Q2 1970

Q1 1974

123.0%

32.8%

Harold Wilson

Q1 1974

Q2 1976

18.2%

10.4%

James Callaghan

Q2 1976

Q2 1979

62.5%

20.8%

Margaret Thatcher

Q2 1979

Q4 1990

187.9%

16.3%

John Major

Q4 1990

Q2 1997

6.3%

1.0%

Tony Blair

Q2 1997

Q2 2007

211.3%

21.1%

Gordon Brown

Q2 2007

Q2 2010

-7.2%

-2.4%

David Cameron*

Q2 2010

Q1 2013

-3.4%

-1.2%

Source: Knight Frank, Nationwide

 

*to March 2013

 

Looking firstly at the total increase, UK home prices rose the most under Tony Blair’s tenure (211.3%) followed by that of Margaret Thatcher, prices increased by 187.9% during her time at No.10.

On an annualised basis, UK prices performed most strongly under Edward Heath when growth averaged 32.8% per annum.

The second highest annual average occurred under Mr Blair’s leadership when UK house prices increased by 21.1%. This was closely followed by James Callaghan’s period in office when, between the second quarter of 1976 and the second quarter of 1979, UK house prices rose on average by 20.8%. Inflation rates during the 1970s (see Table 2) undoubtedly contributed to the strong growth recorded during both Mr Heath and Mr Callaghan’s premierships.

 

Table 2

         

Change in UK residential property prices vs inflation and homeownership

 

Prime Minister

From

To

UK

Inflation*

Home ownership rate

average annual % change

average annual % change

at start of tenure (%)

Anthony Eden

Q2 1955

Q1 1957

2.5%

4.8%

NA

Harold Macmillan

Q1 1957

Q4 1963

6.8%

2.6%

NA

Alec Douglas-Home

Q4 1963

Q4 1964

8.2%

3.3%

NA

Harold Wilson

Q4 1964

Q2 1970

7.2%

4.4%

NA

Edward Heath

Q2 1970

Q1 1974 

3 2.8%

8.6%

51.8%

Harold Wilson

Q1 1974

Q2 1976

10.4%

20.7%

54.9%

James Callaghan

Q2 1976

Q2 ‘1979

20.8%

12.1%

55.7%

Margaret Thatcher

Q2 1979

Q4 1990

6.3%

8.0%

56.6%

John Major

Q4 1990

Q2 1997

1.0%

3.2%

67.0%

Tony Blair

Q2 1997

Q2 2007

1.1%

2.7%

68.6%

Gordon Brown

Q2 2007

Q2 2010

-2.4%

3.0%

69.6%

David Cameron

Q2 2010

Q1 2013

-1.2%

4.3%

66.0%

Source: Knight Frank, Nationwide, CLG, ONS

     

*RPI

         

Although John Major held office during the downturn of the early 1990s the UK still managed to record positive growth of 6.3% growth per annum.

Post 2008 the global financial crisis and its repercussions – rising unemployment, weak consumer confidence and tighter lending constraints – took the wind out of the UK housing market’s sails. As a result Gordon Brown and David Cameron are the only Prime Ministers since 1955 to have presided over a period of negative growth for UK house prices. Prices slipped 7.2% during Mr Brown’s four year premiership and prices are now 3.4% lower than when Mr Cameron took office in May 2010.

              

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