According to the Halifax average house prices have risen by 273% over the last fifty years after taking inflation into account.

Back then a normal house could be obtained for Â£2,507, which in today’s terms is about Â£43,713. This is 3.7 times the actual cost of buying a home, which at present stands at Â£162,085.

Most of this was actually added during the last ten years even taking the recent recession into account.

Let’s look at this in simple terms.

In 1959 the average wage was about Â£14 per week (I could not determine if this included part time workers); that is Â£728 per annum. That makes an average house at Â£2507 equal to 3.44 times the average wage. Now factor in a ten per cent deposit and the deposit is Â£250.70p, that is 34.4% of the average wage. The remainder Â£2256.30p is a mortgage and is 3.1 times the average wage.

According to available figures the most generous average wage is that of someone working full time. This is given as Â£31,000 (Office for National Statistics' Annual Survey of Hours and Earnings (ASHE)). A more modest figure of Â£25,123 comes out on a median gross full time basis. But using Â£32,000 how does today’s average house price of Â£162,085 stack up?

The house itself is 5.23 times the wage. The deposit at ten per cent (Â£16,208.50) is 52% of the wage and the mortgage at Â£145,876.50p is 4.7 times the wage.

Wages in 2009 are 42.6 times the 1959 figure. House prices are 64.7 times the 1959 figure. To buy a mini in 1959 cost Â£496 but now costs Â£11,270, which is 22.7 times the cost.

Averaging out last year’s published public and private annual earnings you get a figure of Â£24,323. Putting that into the figures you get the following. The 2009 average house would be 6.66 times the average wage. The deposit at ten per cent (Â£16,208.50p) would be 66.6% of the average wage. The mortgage at 90% (Â£145,876.50p) would be six times the average wage.

Using today’s wages and the 1959 multiples you reach the following. Using the highest average wage figure of Â£31,000 the house should be worth Â£106,640. The deposit should be Â£10,664, and the mortgage owing Â£95,976.

Using the lower average wage figure you get Â£83,671.12p house price, Â£8,367.11p deposit and Â£75,304.01p mortgage.

Before anyone cries foul, there are more households with two or more earners in them now than in 1959 (I think). So a better guide may have been to use household incomes over the period. There are a huge number of other variables such as the numbers of family members all living in the same house in 1959 compared to now and relative prices of food etc. The big question for me would be how long does it take to save for a deposit in 2010 compared to 1959?

But whether you look at it using the Halifax analysis or the wage analysis I think you can see that house prices are still over-valued and have some way to fall yet.