Would-be homeowners in the UK are struggling to keep pace with the housing market, as a recent study has revealed that the last decade has seen property prices rise at three times the rate of wage increases.
House prices have risen from an average of £127,769 in 2001 to a figure of £236,518 today – a staggering increase of 94%.
The growth in wages has been far more sluggish, with salaries increasing by just 29% over the same period, from £16,557 to £21,330.
“These shocking figures show that is it getting increasingly harder for millions of people to buy a home of their own in the current climate,” said David Orr chief executive of the National Housing Federation, which carried out the research.
“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 area. Unless we start building more homes people can truly afford to match the demand, this will only get worse.”
The ratio between the average house price and average salary in England and Wales has risen from 7:4 in 2001 to 11:1 in 2011.
Some regions in England have experienced an even wider gulf between wage and property price growth over the last decade.
Copeland, in the Lake District, has seen property prices rise by 145% to £129,862 while income has grown by just 5% to £21,117.
In 2001 the average deposit for a typical 90% LTV mortgage was £12,777 or around nine months of average salary. Nowadays, the deposit required for a 75% LTV mortgage is £59,129 – almost three years of an average salary.