Property Prices Rising Faster Than Wages

Property-PricesQuestion: UK house prices rose by what percent in the year to September 2015?

Answer: 6.1% – The average house price has been increased to £286,000

First-time buyers are struggling more and more to step onto the property ladder with UK house prices rising higher and higher each year. House prices have rose by 6.1% in the year to September 2015. This was up from 5.5% in August, and 5.2% in July. The year previous to this, house prices were rising by more than 12%!

Last week, the Royal Institution of Chartered Surveyors (RICS) claimed that property would be becoming “even more unaffordable” over the next five years unless more houses were built. The former chairman of RICS, Jeremy Leaf, said that the housing market was re-energising itself and was far from running out of steam.

Jeremy said that “With the average property price in London now £531,000, unless you earn way above the national average salary, you have precious little hope of being in a position to buy”.

With the prices of houses being so high, first-time buyers are struggling to get onto the property market without a generous income or a partner to share the mortgage with.

Findings suggest that first-time buyers need an annual income of approximately £47,850. This is up from £44,483 a decade ago and £32,105 two decades ago.

Neal Hudson, associate director of Savills Residential Research said, ‘The average buyer no longer has an average income’ and ‘Home ownership is in general now limited to those who are both income and equity rich’. Neal suggested that one of the reasons behind the rise in the average income of buyers could be a shift to shared income mortgages.

Do you have any acquaintances or maybe even children who are struggling to get onto the property ladder? What do you think could be done to reverse the increase in UK housing prices? We would love to hear your thoughts and experiences.

3 thoughts on “Property Prices Rising Faster Than Wages

  1. Watching live theatre from the old BBC centre at White City, I was shocked to hear that this building, sold to developers for £200 million, was being turned into flats: one-bed roomed costing £650,000 and larger in excess of £7 million. There would be some low cost housing built at a later date, apparently. Add that to recent scandals where people, who have been paying rent faithfully for years, have been turfed off estates sold to overseas developers and you have a picture of rampant greed disenfranchising the capital.

    There seems to be little or no committment to providing decent housing for an affordable price or even envisaging this as a national duty. Perhaps there should be an embargo on foreign purchase and investment in certain areas of London. I can’t see a solution, given the rank consumerism that invades every area of life today.

  2. It seems inordinately unfair that those on low incomes have no possible chance to buy. I benefited years ago from the right to buy my council flat, which was later sold, and the price was ludicrously low as compared to current prices. I imagine the same flat would now go for at least 10 times what we paid if not a great deal more. And it was a fairly poor housing estate, crowded and not at all aesthetic.

    A radical change of policy would be needed to reverse the situation. Whether stopping overseas investment would work I don’t know. But a drastic solution is called for.

  3. This has continued to be the case for a number of years now and it is a scandal. However successive governments have done nothing to change it or build affordable housing. In fact on the contrary they have started the right to buy for Housing Association properties which defeats the whole object of these probably the few types of houses left to first time buyers.

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