UK house prices ‘least affordable ever’
Cost of average home has risen 259% since 1997, while earnings grew 68% in same period
by: Gavin Jackson
House prices have increased 259 per cent since 1997 compared to a 68 per cent increase in average earnings in the same period, making houses in England and Wales the least affordable they have ever been, the Office for National Statistics said on Friday.
The average house now costs 7.6 times average annual earnings, compared to 3.6 times earnings in 1997, the ONS said.The rise in house prices has helped to reverse a century of rising home ownership and driven an increase in private renting, especially in London where house prices have risen the fastest. 26.4Multiple of average earnings required to buy a house in London borough of Kensington and ChelseaFigures from the annual housing survey, published earlier this month, found that home ownership in Britain had fallen to the lowest level since 1985 last year — 62.9 per cent of the population owned their own home down from a peak of 71 per cent in 2003.While all areas of the UK have become more unaffordable over the past two decades, the gulf between earnings and prices is widest in London and particularly in the borough of Kensington and Chelsea. The most affordable part of the country is Copeland, in Cumbria.A resident of Copeland would need to pay 3.6 times average earnings to buy a house, compared to 26.4 times earnings for the wealthy west London borough. The recent fall in affordability is mostly driven by London and the south of England. Houses in many parts of the country — including the north east, Wales and Yorkshire and the Humber — were more unaffordable in 2007 before the financial crisis.A resident of London would have needed to pay 12.9 times their earnings to buy a house in 2016, up from 6.9 times in 2002. Someone living in the North East would have had to pay 5.1 times their income, up from 3.3 times in 2002 but lower than the 5.8 times in 2007.
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