“The reason why house prices became so unaffordable is that the prices tripled in the space of ten years, from 1997 to 2007”. Grant Shapps, Today Programme, 30 August

When National Housing Federation warned yesterday that the unaffordability of housing could see home ownership call to levels last seen in the 1980, Housing Minister Grant Shapps was quick to point to a tripling of house prices under the last Government.

Is the housing minister’s claim an accurate one? Is he using the appropriate data? And is he justified in focusing on this particular ten year period. When one reader wrote in asking us to take a look, we decided to investigate.


At first glance the figures appear to pretty much back up the claim. The Department for Communities and Local Government (DCLG) publishes data on the change in average house prices since 1930 on its website

This data can be used to produce the following graph:


By this measure the average house price increased in the period from 1997 to 2007 by a multiple of 2.88, reasonably close to Mr Shapps’ claim.

However, the small print below this very same data cautions against the use of these figures to estimate house prices, stating that while such figures are suitable for a rough and ready estimate they are not ideal due to the fact that they do not account for differences from year to year in the proportions of different types of property sold. “Mix adjusted” figures that take this into account are also available, however, from 1993.

Even using these figures, Full Fact estimates that the average house price increased from 1997 to 2007 by a multiple of 2.76 – not too far removed from a three-fold increase.

The real problem with these figures, and the reason that they do not tell the complete story, is that they do not take inflation in the wider economy into account.

DCLG also publishes figures for changes in house prices adjusted for RPI inflation.

As the below graph illustrates, once inflation is taken into account, real prices can only be shown to increase by a multiple of 2.23 from 1997 to 2007.

bold – unadjusted

faint – inflation adjusted

A more than doubling of average house prices in real terms in ten years still seems pretty significant though. But was it unprecedented? Does Mr Shapps’ focus on these ten Labour Government years to exclude any significant information about the preceding years?.

Although the figures going back this far aren’t published by DCLG, Full Fact was able to estimate the change in average house prices in real terms (using the same RPI figures) for the period from 1987 to 1997. The result: a real terms increase of 22 per cent. It seems therefore that the period, 1997-2007, was exceptional in terms of real average house price rises


Based on the inflation adjusted figures, the claim that house prices tripled in the ten years, is somewhat overstated.

However, the broader point that house prices in that period increased significantly both in real terms and compared to the previous ten year period is clearly demonstrated, whichever figures are analysed.