A new research has found that the gap between how much property costs and how much people earn continues to get bigger.
The data was put together by property portal Zoopla and revealed that across the country average house price growth is out-doing average salary growth by 1.13%. The report shows that average home values have risen by 0.52% whilst salaries have actually experienced a drop of 0.6%.
Another research, put together by Adzuna, a job search engine website, showed that currently the cheapest places, i.e. the smallest gap between house prices and salaries, can be found in Hull, Newcastle and Bradford.
According to the Zoopla findings, Luton, close to London, is the places with the biggest gap at 7.99%. In Luton, prices increased by 5.06% over the last twelve months whilst salaries dropped by a spectacular 2.94% during the same time.
Stevenage, located north of London, came in second with a house price growth that was 6.41% higher than the growth of average salaries. High Wycombe, located north-west of London, came in third with property prices increasing at a pace 5.43% better than salaries.
When it comes to the capital itself, property price growth is currently 19.53 times the average salary. This helps shine another light on how rarely Londoners will be able to afford to own their home over the next few years.
With house price growth still rising and salary growth dropping in many areas, home ownership is becoming more and more of a distant dream for many young adults, with very little change in sight.
Lawrence Hall is Zoopla’s spokesperson and commented the report’s findings:
“Getting on the property ladder can be tough, especially if you’re looking to buy in an area where property prices are rising faster than salaries. If you’re a first time buyer and can be flexible where you buy, then why not look at the areas where salaries are rising faster than property prices. For example, in Chelmsford property prices are rising at a steady rate, but the average salary is rising even faster.”
“The data also shows a clear affordability north-south divide, where the top 10 most unaffordable places regarding house price to salary ratio are all in Southern England. In contrast, the top 10 locations where house prices are more in line with salaries, are predominantly in Northern England,” he concluded.