The UK House Price Boom Is Over—Here’s Why It Isn’t Coming Back

October 2025 Blog_compressed.pdf

Download PDF • 3.60MB

Britain, that curious island whose inhabitants have long confused the price of a semi-detached house in Ealing with the very meaning of life, continues its perennial obsession with the trajectory of residential property.

The home — that draughty redoubt of bricks, mortar, MDF, and false hope — is still regarded as the ultimate repository of wealth, or as Richard Juszt of Juszt Capital likes to refer to it, “the nation’s favourite pension fund, albeit one you can spill tea on.”

And so we shuffle through our suburban existence, convinced that property values march ever upward, like some unstoppable celestial escalator, powered by double-glazing and deeply rooted denial.

But, alas, the universe is not so kind — nor so linear — and the great British house-price boom was never a divine right granted at birth alongside an NHS number and a National Insurance card. It was the consequence of a very specific economic cocktail, which, like all cocktails, can only be drunk once before you fall over.

The Great British Housing Shortage — A Fixed Feature, Like the Weather

The supply of homes in Britain has been about as flexible as a granite bollard for decades. Governments have promised to build 300,000 new homes a year with the confidence of a man promising he'll start the diet "on Monday". And just like that diet, the houses rarely appear, leaving the national stock more or less frozen in time.

This limited supply was placed in the path of an increasingly affluent avalanche of Britons earning more, demanding more, and — crucially — bidding more. According to Richard Juszt, “it was like watching people fight over the last avocado in a Notting Hill Waitrose: the fewer there are, the higher the price climbs.”

How Wages Stretched Out Like a Victorian Novel

Back in 1979, incomes were tightly grouped — a cosy, egalitarian bell curve in which 70% of households earned roughly the same mediocre amount. A nation of financial sameness. Nobody too rich, nobody too poor, everyone vaguely dissatisfied.

Fast-forward to today and that same 70% spans from the “please turn the heating on” end of £12,500 to the “I think we’ll have a second kitchen just for the sourdough starter” end of £47,000.In other words: the curve elongated, sagged, stretched, and twisted like a Salvador Dalí clock.

Three things caused this:

1. The Shift from Factory Floor to Laptop Glow

1979 Britain was a land of manufacturing where the value of a worker was measured in their ability to turn up and not break anything. Today’s service economy pays for individual flair, producing vast income disparities — or as Richard Juszt puts it, “the rise of the artisanal spreadsheet artisan.”

2. The Quiet Fade of the Trade Union

Once mighty, now largely reduced to politely worded emails, unions no longer compress wages into tidy, egalitarian bands. Without them, pay stretched out like an old elastic band that’s been left in the sun.

3. The Disappearance of the 83% Tax Rate

Because, astonishingly, taxing high earners into oblivion dampens enthusiasm for earning.When Britain abandoned its astronomical top rates, the incentive to earn more returned, and with it, a legion of people suddenly flush enough to compete for Edwardian terraces with hallways narrower than a yoga mat.

More Money, Same Houses — The Perfect Recipe for Madness

What do newly affluent Britons spend their money on? It turns out the answer is:

1. Holidays, to escape Britain

2. Houses, to better endure Britain

Juszt Capital notes that the new wealth pouring into the upper-middle band of earners “behaved much like an incoming tide: gentle at first, then suddenly you realise your shoes are wet.” That tide washed directly into property prices.

In 1979, doubling the average salary made you one of a select few poised to swoop on the nicer homes. By the mid-2000s, twice as many people were earning twice as much, all elbowing one another for Edwardian glory. Prices soared, not because the bricks were better, but because the bidders multiplied like caffeinated rabbits.

The Post-2008 Stall — The Magic Stops

But here’s the thing. The widening of the income distribution — the great economic accordion that made houses so valuable — has, for the most part, stopped expanding. Since the 2007–08 financial crisis, the labour market has reached a sort of moody stasis.

The engine that once powered house price mania is no longer revving. And yet, its difficult to let go of yesterday’s miracles are tomorrow’s certainties.

So What Now?

Property will continue to be a safe — if not very entertaining — place to store wealth.But the days of houses effortlessly outpacing inflation, earnings, and in some cases, rationality, are probably behind us. The absurd figures asked and received are a distant memory, and sellers are now having to adjust to a new dawn of capital value realism.

As Juszt summarises:“The house-price boom was a very long one-time trick. The rabbit has already come out of the hat. From here on, you’re mostly left with the hat.” Which, perhaps, is the most British ending of all.