The difference between UK individual incomes and the current level of home prices has grown so large in the past two decades. In a recent report from theguardian.co.uk, the most affordable regions in England and Wales would cost buyers six times their income according to the latest data obtained.
London's home prices are even further away from income earners' reach, requiring about 12 times the median Londoner's income for a median priced house.
The study conducted by The Guardian analyzed 19 million home sales in a twenty year period. The information was obtained from Land Registry statistics and HMRC data. It was found that there were varied increases in home prices that have been disproportionate to the rise in incomes in the area. The only conclusion this leads to is the inability of millions of UK income earners from ever participating in the property market.
According to Hamptons International Residential Research Director Fionnuala Early, "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."
Early added, "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."
London was home to 36 of the most expensive postcodes in the United Kingdom, added The Guardian report. The median house price was £2.9m where the most expensive home sold was at £18.4m while the most inexpensive one was at £155,100.
There are many other consequences to this trend, as reported on presstv.ir. This was highlighted by Foreign Policy in Focus Senior Analyst Ian Williams, in an interview, said that the 'increasing home prices exacerbate the social and geographic divide in Britain.'
