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Only 10% of Britain’s wealthiest households will be able to afford to buy a home in the year to March 2023 with household income of less than five years, but property prices in London remain out of reach for all income groups. Ta.
The Office for National Statistics said on Monday that in the 12 months to March last year, the average annual income for disposable housing in the UK was £34,569, the average house price was £298,000, a ratio of 8.6 times. Ta.
The Office for Statistics defines “unaffordable properties” as properties that require income for five years or more.
According to the ONS, for the poorest households, the average house price in England is 18.2 times their average income, and only the richest 10 per cent of households meet the affordability criteria, with a ratio of 4.3. be.
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London ranks first among all UK countries and regions in that house prices are well above the national average, with the average home defined as being unaffordable for all income groups. It was the only one.
The agency said the cost of a typical property in the capital is equivalent to about 35 years’ income of the poorest household and 5.9 times the income of the richest household, exceeding the affordability threshold. .
Stephen Perkins, managing director at brokerage Yellow Brick Mortgages, said the figures showed that it was becoming “increasingly difficult for households, particularly young people, to get onto the housing ladder”. said.
“Wages and disposable income cannot keep up with soaring house prices. For many aspiring homeowners, this data reveals an economic Everest for them to climb,” he added. .
Promoting access to the property market is a focus of Sir Keir Starmer’s government, with the Prime Minister vowing to “build Britain back” and build 1.5 million new homes in the current five-year parliament.
The last time the UK succeeded in building 300,000 new homes in a single year was in 1969, and in the year to March 2024, the UK public and private sectors built a total of around 200,000 new homes. .
Chris Curtis, co-chair of the Labor Growth Group, a group of MPs within the ruling party, said the ONS data “shows the staggering scale of our country’s housing crisis and we need to do this to end it”. “This underscores the urgency of the challenges facing the government.”
“We need to grow our economy and ensure that rising pay packets mean it’s not just the privileged few who can afford to get on the housing ladder,” he added.
Separate official data shows house prices have been rising through most of this year since contracting in 2023, when mortgage costs peaked.
In 2022-23, the latest year for which data is available, London’s affordability ratio was 14.1, down from a peak of 14.7 in 2016-17, when house prices in the capital started falling below the national average. However, the capital city remains the region with the highest real estate prices relative to income.
This compared to Wales at 5.8, Scotland at 5.6 and Northern Ireland at 5.0.
In the UK, house prices were defined as affordable until 2001, but since then they have risen twice as fast as household incomes.
