Nominal prices, inflation-adjusted prices, and the house price-to-earnings affordability ratio — exposing the gap between headline numbers and what housing actually costs relative to wages.
Nominal prices rose ~38% from 2015 to 2025 (£197k → £272k). But once you strip out inflation — particularly the 25%+ cumulative CPI rise since 2020 — prices are only 2.9% higher in real terms between 2015 and 2025. The 2021-22 boom largely disappears once adjusted. Much of the "price growth" was simply the pound buying less.
The price-to-earnings ratio hit ~8.96x in 2021 — meaning the median home cost nearly nine years' gross salary. By 2024 it had eased to ~7.5x, thanks to strong wage growth (+20% since 2021). But that's still far above the 5x threshold traditionally considered "affordable" — a level that hasn't been consistently achieved nationally since 2002.
In real terms, UK house prices in 2025 are roughly where they were in late 2021 — the pandemic spike has been entirely eroded by inflation. The long-run chart from 1999 shows the structural shift clearly: the ratio doubled from ~4.4x to ~8x in just five years (2001-2006) and has never returned. Transactions collapsed from 1.8m to 850k after 2007 and have never fully recovered either.