Measuring the interwar housing boom: House prices and rents in England, 1913–39

Abstract

Existing statistics about England's interwar housing market are sparse and based on outdated sources and methods. This article seeks to improve upon them by drawing on mortgage data from a major London-based building society and using the hedonic method of price index measurement to construct house price and rent indices for residential houses that are robust to intertemporal sampling differences. It is found that house prices and rents in England both rose significantly between 1919 and 1926 but moderated thereafter and declined throughout the 1930s housing boom. Further evidence indicates that there was excess supply in the housing market during the boom, driven by cheap money and a deliberate strategy by building societies of ‘making the market’ by fuelling private house construction.