House prices rising three times as fast as wages
Despite problems having been prevalent in the housing market for the last few years, and prices having fallen since their 2007 peak, it has still been reported that there is a sizeable gap between what people in the UK earn and what they can afford to buy.
The National Housing Federation has said that it is now the case that the average price of a house has risen by three times more than wages have in the space of just a decade between 2001 and 2011.
The mean price of a home in 2001 was £121,769, and by 2011 this had risen to £236,518, an increase amounting to around 94 per cent. However, during the same period of time, the money that people have earned while they are at work has only gone up from £16,557 to £21,330, an increase of just 29 per cent.
Perhaps more depressingly, the cost of getting a mortgage has also risen astronomically. With most lenders now looking for at least 20 per cent of the value of a house as down payment on the property, the organisation said that the average level of deposit now sits as high as £59,129, 386 per cent higher than was needed in 2001, when 90 per cent lending was still highly popular.
This discrepancy is causing a shortage of people who can afford to buy, which means that it is now the case that the rental homes market is booming, while those trying to offload houses are suffering against a backdrop of poor economic health and having to drop their asking prices.
David 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."
Posted at 04:48 17/08/2012