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House prices outweigh incomes

House prices outweigh incomes

Category: Mortgages

Updated: 17/08/2012
First Published: 17/08/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The gaping void between house prices and the average income has grown dramatically over the past ten years, dashing the hopes of potential buyers.

House prices have increased by a massive 94% over the past ten years, from £121,769 to £236,518 today. Salaries meanwhile have risen by a measly 29%, to £21,330, reflecting the worrying fact that house prices have risen three times more than incomes have.

The cost of living, coupled with slow income growth, has also impacted on the ability to save for a deposit, with the typical deposit required for a 75% mortgage at £59,129, equating to at least three years' salary.

Research by the National Housing Federation revealed that in 2001 the ratio between the average house price and income was 7:4, much lower than the 11:1 today.

d
avid Orr, chief executive of the National Housing Federation, said: "These shocking figures show that it is getting increasingly harder for millions of people to buy a home of their own in the current climate.



"With the gap between income and house prices growing ever wider, people can often feel like they have to win the lottery to be able to buy in their local area."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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