Changing values

The Queen has turned 90. So much has changed since her birth back in 1926, especially on the money front. We take a look at how the cost of living has changed during this era.

If the price of a 250g pack of butter back in 1926 had risen at the same rate as house prices, it would now cost £24.97.

House prices
Since Queen Elizabeth II was born, average UK house prices have risen from a modest £619 to £291,504 (based on the latest Office for National Statistics figures). Over the past 90 years, this represents an incredible 47,021% increase in average UK house prices.

To illustrate this 471-fold increase, imagine a 65cm pot plant, which could easily fit under a kitchen table, growing into a giant tree taller than London’s Shard standing at a dizzying 306 metres.

Comparison with other investments
There is no doubt that average UK property prices over the Queen’s long 90 years of life have risen significantly, making residential property purchases a top performing investment.

If the £619 invested in an average priced UK property in 1926 was instead invested in UK equities, it would have risen to £72,952 by the beginning of 2016. A 118-fold increase, equivalent to an 11,685% rise.

Over the period the UK’s cost of living index rose by 5,413% implying that £619 cash in 1926 would be now worth £34,105.

A shopping basket – 1926 vs 2016
A pint of milk would have cost 3d (1.3p) in 1926 and 42p in 2016, a rise of 3,131% and a medium white loaf 4 ⅟₄d (1.8p) rising to £1.12 in 2016, an increase of 6,122%.*

It is interesting to note that, if the price of a 250g pack of butter back in 1926 had risen at the same rate as house prices, it would now cost £24.97 and one kilogram of cheddar cheese would cost £61.26!

Of course the only real way to gauge values is how long it takes a worker to earn the price of a loaf of bread.

*Source ONS 1926 and February 2016