Home buyers pay 7.6 times their earnings for a house

 

On average, people paid around 7.6 times their annual earnings in 2016, a number that has more than doubled in 20 years.

The average price for residential property has seen an increase of 259% between 1997 and 2016. Average individual earnings on the other hand only saw an increase of 68% over the same period of time, figures from the Office of National Statistics have revealed.

https://www.buyassociation.co.uk/2017/02/15/industry-reacts-latest-house-price-index/

Across England and Wales, the most affordable area in 2016 was Copeland, where house prices average at 2.8 times the annual earnings. Kensington and Chelsea represented the opposite end of the spectrum as house prices were 38.5 times greater than annual earnings.

The gap between least and most affordable continues its growth across Britain and housing affordability has dropped to its lowest rate.

The housing report by ONS also shows that affordability has seen the biggest drop in London over the last two decades.

Shaun Church, director of mortgage brokers Private Finance, said that the figures mean it is getting harder to get on the housing market. “Limited access to mortgages at more than 4.5 times borrower’s income means that, with the average house prices now 7.6 times greater than average earnings, means growing numbers have found themselves excluded from the property market,” he said.

“But fortunately, low interest rates and mortgage repayments have gone some way to ease the pressures they face but younger would-be buyers are the biggest losers from the growing imbalance between house prices and earnings.”

https://www.buyassociation.co.uk/2017/02/23/broken-londons-house-prices-one-graph/

Furthermore, he also pointed out that in London’s most expensive boroughs, Kensington and Chelsea, it’s becoming nearly impossible to be able to afford your own home if you don’t belong to the country’s wealthiest.

“Such an imbalanced situation creates obvious temptations for policymakers to interfere with the market. However, it is absolutely imperative that they avoid destabilising the housing market for political ends, as was the case with the changes to stamp duty last year.”

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Home buyers pay 7.6 times their earnings for a house

Home buyers pay 7.6 times their earnings for a house

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