House prices have been rising faster than earnings over the last two decades, highlighting a growing affordability gap.
On average, working people could expect to pay around 7.6 times their annual earnings on purchasing a home in England and Wales in 2016, up from 3.6 times earnings in 1997.
The figures are in a new report from the Office of National Statistics which looks into earnings and the price of housing.
The report says that the median price paid for residential property in England and Wales increased by 259% between 1997 and 2016.
By contrast, median individual annual earnings increased by 68% in the same period.
The most affordable local authority in 2016 was Copeland, in Cumbria, with house prices being on average 2.8 times greater than annual earnings.
Not surprisingly, the London borough of Kensington & Chelsea was the least affordable place in England and Wales, with house prices being 38.5 times greater than annual earnings.
The report also finds that the gap between the least affordable and most affordable parts of England and Wales has increased over the last two decades.
Housing affordability has, says the ONS, worsened in all local authority districts, but has deteriorated most in London.
The housing crisis is the result of the governments lack of control on interest rates – you dont need to be Einstein to realise that investors are taking their money out of stocks and shares due to failing interest rates and putting them into bricks and mortar pushing house prices up specifically rental prices which are increasing becoming unaffordable in popular areas, leading to rent arrears, homelessness and demand on social housing lists. The answer to the problem is to offer alternative investments to investors and to leave housing to professional landlords not a quick profit from increased rental!
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