In ten years the average increase in the price of a home in the UK has soared compared with salary increases, making property more expensive, new research from the National Housing Federation shows.
In 2001 the average price of a home was £121,769, and the average salary was £16,557. In the space of ten years the price of a home has risen to £236,518, an increase of 94%, whereas wages have risen just 29% to £21,330.
It says that saving for a mortgage has also got a lot harder with the amount of deposit needed to get a mortgage rising by 386%. In 2001 the deposit for a typical 90% mortgage was £12,177, about nine months salary.
By 2011 the amount banks were willing to lend was less, and so the deposit needed for a typical 75% mortgage leapt to £59,129, almost three years salary.
In 2001 the ratio between average house price and salary was 7.4, but by 2011 that had risen further to 11.1. Regional variations show even greater gaps with the biggest change in Copeland, where house prices rose by 145% and incomes by just 5%.
The areas where the gap between average house prices and wages has increased most over ten years are: Copeland, Watford, Corby, Redcar and Cleveland, Burnley, Kensington and Chelsea, South Ribble, Calderdale, Staffordshire Moorlands and Basildon.
David Orr, chief executive of the National Housing Federation, described the figures as shocking. ‘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,’ he said.
‘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,’ he added.
Most Popular Slideshows
- Australia Bids Adieu to Adam Spencer's Mornings on ABC's "702 Breakfast" Show [PHOTOS]
- Top 10 Hottest Celebrities with Shocking Weight Loss (And Find Out Their Secrets!) [PHOTOS]
- SEE PHOTOS! Eva Longoria Wears No Panties at Cannes 2013, Revealed in Embarrassing Wardrobe Malfunction [SLIDESHOW]
- Demi Lovato Snapped Getting Flirty with The X-Factor Boss, Simon Cowell? [PHOTOS]