House price boom outstrips wage rises
House prices in East Anglia have risen more than five times as fast as people's pay over the past decade, fuelling the crisis over affordable housing.The figures highlight just how difficult it is for people to reach the first rung on the housing ladder and are contained in a report published today by the TUC, which claimed the “stark figures bring alive the housing crisis”.
House prices in East Anglia have risen more than five times as fast as people's pay over the past decade, fuelling the crisis over affordable housing.
The figures highlight just how difficult it is for people to reach the first rung on the housing ladder and are contained in a report published today by the TUC, which claimed the “stark figures bring alive the housing crisis”.
The difference between the growth of house prices and salaries in the east of England is the biggest in the country.
In Norfolk the difference is even greater than in the region as a whole, with house prices rising 5.7 times as much as wages as opposed to the regional figure of 5.3 times.
You may also want to watch:
Today also sees the publication of another report, suggesting that housing affordability has deteriorated to near record levels.
That report is by the Royal Institution of Chartered Surveyors (RICS), which said the strong growth in house prices coupled with five recent interest rate rises had helped make property 350pc less affordable for first-time buyers than it was in 1996.
- 1 Mum's heartfelt tribute to daughter who died in A47 collision
- 2 Flight bound for Norwich turns back to Aberdeen
- 3 Rail services affected after person hit by train
- 4 Work started on four new homes without permission
- 5 Holt Hall for sale after years of uncertainty
- 6 Murder investigation launched after body of man found in Norwich flat
- 7 Swathes of new homes for village move step closer with new planning bid
- 8 Woman has heart attack and dies in ambulance waiting for a hospital bed
- 9 Farm worker fined after hay bales fall off trailer and hit car
- 10 Who can get a Covid booster jab and how can I book one?
“Housing is by far and away the biggest cost for most people at work in the east of England, yet they have seen the biggest growth in the price-pay gap,” said TUC general-secretary Brendan Barber.
“These stark figures bring alive the housing crisis. They show just how quickly buying your own home has gone out of the reach of many working people.
“It is striking that house prices seem to have gone up in line with the pay of top directors and the super-rich, rather than middle and low earners.
“These figures show just how much housing has become an engine of inequality. If you are lucky enough to own your own home you have got that bit richer every day than those that do not.”
According to the TUC, the average house in the east of England cost £63,950 in 1997, which was equivalent to 43 months of the average wage of £17,963.
But since then, house prices have risen by 178pc, taking the average to £177,950, while the average wage has gone up by only 33pc, to £23,950. Today it takes seven years and five months for someone on the average wage to earn the cost of an average home.
Across England, house prices have gone up 4.1 times faster than pay over the past decade, and RICS said first-time buyers were particularly badly affected.
“First-time buyers are facing an enormous struggle to access the housing market,” said David Stubbs, the institution's senior economist.
“Even if prospective first-time buyers make it on to the market, they face mortgage payments which take up a higher percentage of their take-home pay than at any time since 1990.
“House prices have risen by more than 11pc a year since 1996 whereas first-time buyer incomes have only risen by 3.5pc a year.
“This has forced buyers to borrow ever greater amounts and now higher interest rates are applying pressure to the household finances of recent buyers.”
Housing minister Yvette Cooper said: “These reports show how important it is for councils, communities and housebuilders to back plans for two million more homes by 2016.
“The long-term rate of housebuilding hasn't kept up with rising demand, causing long-term house prices to increase.
“The level of new housebuilding is at its highest since 1990, but we need a national consensus on building more homes. Those who are still opposing new homes need to face up to the unfair consequences for first-time buyers and young families who badly need new affordable homes.”
Dave Richardson, head of group marketing at Howards, an agency covering Norfolk and north Suffolk, said: “Part of our business deals with the issue of affordable housing.
“We work very closely with housing associations where people can part-buy and part-rent, and that enables a lot more people on low incomes to afford a home.”
x-ref to leader