Bristol sees house prices go up by 39% in the last decade
01-08-2014
By The Bristol Post
House prices 
HOUSE prices in Bristol have gone up 39 per cent over 10 years – far outstripping wages, new figures show.
The average house price in the city is now a staggering £243,280, according to data published by the Nationwide.
The rise is even more astonishing considering that it includes the credit crunch and recession, when house prices fell.
Bristol house prices have risen five per cent since the same time last year, and over 10 years the percentage rise is the biggest in the South West.
The next biggest long-term increases were in Cheltenham where prices rose 34 per cent to £255,501, and Bath, which also rose 34 per cent to £265,771.
Nationally, prices have risen 30 per cent in 10 years and 8.4 per cent in 12 months ago, driven by rises of 14 per cent in London.
In contrast, earnings are currently growing at just 1.1 per cent according to Moneyfacts.co.uk.
Office for National Statistics figures show that since 2003, Bristol average earnings have risen by 27.6 per cent, and less in the neighbouring council areas of North Somerset (25.2 per cent), South Gloucestershire (23 per cent) and Bath and North East Somerset (13.6 per cent).
Nationwide chief economist Robert Gardner said: "A large part of the pick-up in the housing market can be attributed to further improvements in the labour market and the brighter economic outlook, which helped to bolster sentiment amongst potential buyers."
He pointed to Government policies such as the Help to Buy scheme which has meant more people with just a five per cent deposit can get a mortgage as the Government underwrites part of the loan, as playing a role in the rise in demand.
"Part of the reason for the acceleration in house price growth is that the supply side of the market has not kept pace with the upturn in demand, even though buyer numbers remain subdued by historic standards," he said.
"For example, in October to December 2013 the number of housing transactions in England was around 25 per cent below pre-crisis levels, while the number of new homes built was around 45 per cent lower."
He added: "Affordability is being supported by the ultra-low level of interest rates. A typical mortgage payment for a first time buyer is currently equal to around 29% of take home pay, close to the long-term average.
"However, the risk is that if demand continues to run ahead of supply in the quarters ahead, affordability may become stretched. House price growth has been outstripping average earnings growth since the middle of the year."
According to Moneysavingexpert.com, even with a 10 per cent deposit, a single person would need to be earning around £50,000 to borrow enough to buy the average Bristol house. A couple would need a combined income of closer to £65,000.
Bristol East's Labour MP Kerry McCarthy said "soaring rents and house prices" were "crippling people and families in Bristol" and called for action to build more homes to bring prices down.
"We really need action to get spades in the ground and build affordable housing," she said.
"Last year the Government presided over an 11 per cent fall in new home builds compared to 2009 and Bristol's Mayor managed to build just 50 homes, despite his promises to build many more.
" This just isn't enough. Ed Miliband has promised a Labour Government would double house building by 2020 but for now Bristol's Mayor needs to make social and affordable housing an absolute priority and try to emulate other Councils who are delivering despite central Government cuts and falling section 106 receipts."