House price wage balance gets tougher
Friday, 17 August 2012 10:55 AM
Growth in house prices continues to massively outstrip the rise in wages, according to research from the National Housing Federation.
Over the last ten years the average house price has gone from £121,769 to £236,518, a leap of 94 per cent.
In comparison average wages have risen just 29 per cent, from £16,557 to £21,330.
Saving for a mortgage has also become more difficult, with the level of deposit required soaring by 386 per cent.
This is in part due to banks now being less prepared to lend, so the typical 90 per cent mortgage deposits of £12,177 in 2001 are now 75 per cent mortgages, equating to £59,129.
The difference in salary terms is nine months to almost three years.
David Orr, chief executive of the National Housing Federation, says; "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.
"A shortage of homes means the price to buy them is being pushed ever higher by the market, and out of reach of millions of hard working families. Unless we start building more homes people can truly afford to match the demand, this will only get worse."
Certain parts of the UK have been hit far harder than others, with Watford, Corby, Burnley and Basildon amongst those where the gap between wages and house prices has become most pronounced.
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