Miserable life: Guardian survey shows incomes far behind house price growth
09-06-2015
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Published by Brian Church for 24dash.com in Housing
Newcastle
A comprehensive survey of house prices and incomes in England and Wales has shown buyers must now spend six times their income even in the cheapest areas.
The Guardian said it had analysed 19 million sales over 20 years (from Land Registry and HMRC data) which demonstrated that "in every region in England and Wales there have been dramatic increases in house prices in proportion to incomes, fuelling concerns that millions will be locked out of the UK property market".
In 1995, a homebuyer on the median salary for their region spent 3.2-4.4 times their salary on a house, depending on where they lived. The paper said that "in 2012-13, the last year for which complete data is available, the median house price had risen to between 6.1 times and 12.2 times median regional incomes".
Unsurprisingly, the capital tops the table of shame. Back in 1995, the median income and median house price in London were £19,000 and £83,000 respectively, or 4.4 times income. By 2012-13, that had rocketed to 12.2 times with the median income £24,600 and the median house price £300,000.
Even in the North East, the most affordable region in England and Wales, the proportion of income spent on property went up from 3.4 times to 6.1 in the same time span.
Fionnuala Earley, residential research director at estate agents Hamptons International, was quoted as saying: "House prices have completely outstripped income growth. The biggest factor is that in the run-up to the crash, interest rates were low, so you could afford to service a bigger mortgage then. There was also low inflation on essentials like food, fuel, transport and utilities, so people had more money in their pockets and were able to gear up for bigger mortgages."
Duncan Stott, director of campaign group PricedOut, got little comfort from the figures.
"It’s not just that every region has got more expensive, but how much more expensive some regions have got," Stott told The Guardian. "When you look at places where housing prices are increasing, places like Cambridge, Reading, Bristol, Oxford, these are places where jobs are being created but they’re completely unaffordable, so there’s a huge mismatch between the labour market and the housing market."
The paper adds: "After London, the most expensive regions for property are the South East and South West of the country, where houses cost 9.9 and 9.2 times the median incomes of those regions respectively. This is followed by the East of England (8.8 times median income), the West Midlands (7.3 times), the East Midlands (6.9 times), Wales (6.8 times), and Yorkshire and the North West (each 6.6 times).”
The cheapest postcode district was central Bradford with the median house price in BD1 at £40,000, with the cheapest property selling for £29,000.