Annual Change in UK House Prices

This graph shows the annual % change in UK house prices during the past 10 years.

The early 2000s involved a rapid house price boom with the annual rate of house price inflation exceeding 25%.

The boom was caused by:

• low interest rates,
• positive economic growth
• Generous mortgage lending
• high confidence
• relative shortage of supply

The housing crash began in early 2008. The market turned at the end of 2007, at the onset of the credit crunch. Bank lending froze making mortgages difficult to get. This also caused a drop in confidence. At its worst house prices were falling at an annual rate of 15%.

Annual % Change since 1992