UK house prices up 12.1% in a decade after inflation

A study from estate agency Yopa has found that while British home prices have surged by 51.8% since 2014, this growth shrinks to just 12.1% when accounting for inflation.

Its Housing Market Affordability Review looks at 10 years of shifts in homeownership costs and their effects on buyers’ purchasing power amid rising earnings and moving expenses.

The initial insights from this decade-long review highlight how property values have evolved across various market segments.

Between December 2014 and December 2024, the typical UK home price leapt from £176,561 to £268,087 — a 51.8% uptick.

Yet, once inflation is factored in, Yopa’s data reveals this increase drops to 12.1%, tempering the idea of runaway house price rises.

Rate of house price growth

The agency’s chief executive, Verona Frankish, said: “The topline rate of house price growth seen over the last 10 years alone can be pretty scary at first glance, to say the least, with the average value of a home increasing by almost 52% since 2014.

“However, the reality is that this rate of growth is far more palatable when taking inflation into account, although it’s fair to say that the plight of the nation’s homebuyers certainly hasn’t improved when it comes to the affordability of purchasing a property.”

She adds: “What is interesting is that the gap between the cost of a first home and the rest of the market has remained largely consistent, as the cost of a home across both market segments has increased at almost identical rates.

“The same certainly can’t be said for the new-build sector though, with the value of a new home skyrocketing over the last decade when compared to the increases seen across the rest of the market.”

Inflation adjusted house prices

First-time buyers have faced a similar trend, with starter home costs climbing 50.6% over the decade — or 11.2% with inflation adjustments.

Meanwhile, homes bought by existing owners rose by 51.7%, equating to 12% after inflation.

A decade ago, first-time buyers paid 30.8% less than existing homeowners, a disparity that has edged up slightly to 31.3% today.

New-build homes, however, have outpaced everything else, with their average price soaring by 79% in the last 10 years.

Even after inflation, this equates to a hefty 33.1% rise.

By comparison, existing properties saw a 51% increase, or 12.3% when adjusted.

Consequently, the premium for new-builds over older homes has ballooned from 23.7% in 2014 to 46.6% today.