No wonder rental demand continues to rise!

by Property 118

14:19 PM, 27th February 2017
About 2 years ago

No wonder rental demand continues to rise!

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No wonder rental demand continues to rise!

city pricesLloyds Bank has produced a report on the affordability of homes in UK cities showing the average price of a house in a city is now 6.9 times the average annual salary.

These are the least affordable home figures since 2008!

Since 2012 the average city house price has risen 32% from £169,966 to £224,926 while over the same five year period city incomes have only increased by 7% to £32,726.

Top of the least affordable city league table is Oxford with the average house price of £385,372 compared to an average income of £36,033 giving a cost to ratio of 10.69.

Conversely the city of Sterling came out the most affordable with house prices on average just 3.7 times annual salaries.

As well as Oxford there were four other cites where the affordability ratio was above 10 times income:

  • Winchester 10.5
  • Greater London 10.5
  • Cambridge 10.3
  • Chichester 10.0

The most affordable cities were all in Northern England, Scotland and Wales:

  • Sterling 3.7
  • Bradford 4.4
  • Hereford 4.7
  • Sunderland 4.9
  • Durham 5.0
  • Glasgow 5.2
  • Swansea 5.2

Lloyds Bank Mortgage Products Director, Andy Mason said cCity living is becoming increasingly expensive with average house prices at least ten times average annual earnings in five of the UK’s cities. Affordability levels have worsened for four consecutive years as average city house prices continue to rise more steeply than average wage growth.

“House prices in the south have generally seen stronger growth than in the north. St Albans has recorded the biggest gains over the past decade, whilst London has been the top performer during the recovery.”



Comments

Gary Nock

14:59 PM, 27th February 2017
About 2 years ago

Just wait for the " but only one in five (tenants) (landlords) (homeowners) -delete those not applicable-" line is trotted out by Greg, Phil and Tess...

Cautious Landlord

15:38 PM, 27th February 2017
About 2 years ago

Interesting headlines but as usual they don't reflect the whole story. As Michael Fickling posts on another thread the bland comparison average house price to average wage is very misleading -no mention of record low mortgages as a result of sustained historically low bank base rates for example ! I am also not alone in thinking that the younger generation (and I am not that old !) have an increased sense of entitlement - new i phone, new tablet, new laptop, new large TV, new games console, new car (on PCP), fpreign holidays at least twice a year then new home etc. Buying a house was not easy when I got my first one nearly 30 years ago. I bought a hovel with dry rot, no heating, damp, dreadful windows etc. Lived in the smallest room and let out the others. Got myself a cheaper staff mortgage at 5% when base rate was 15%. Stll had to pay 5 times annual salary for it then. My wife bought a place off executors with her two brothers and shared the renovation costs. Would all the little darlings these days consider the inconvenience of lodgers, shared ownership and extensive piecemeal renovation. Me thinks not. The affordability issue is greatly exaggerated in my humble opinion - nothing worth having comes without sacrifice.

Paul Temple

13:40 PM, 28th February 2017
About 2 years ago

Reply to the comment left by "Cautious Landlord" at "27/02/2017 - 15:38":

There was one of those 'can you help me' articles in The Times last week from a 20-something - "me and my boyfriend want to be able to afford two extended long-haul holidays a year - oh, and save up to buy a house..." The long-haul holidays were clearly the focus and the house very much an add on.

Your article got me thinking about other things that people buy and how they rate alongside multiples of salary. For example, how has the salary multiple changed for car buyers over the last 20 years?

Also, do some of these people not realise that because they have got huge car loans and massive credit card debt (from long-haul holidays...) and other restraints on their free cash that their chance of getting a mortgage approved are significantly restricted?

It's your choice to go out and buy an expensive car but don't winge to others if you can't then get a mortgage.

Hemant Shah

8:43 AM, 5th March 2017
About 2 years ago

Absolutely correct
I remembered paying 15% interest rate and worked like a hours.
Forget holidays and buying expensive goods. People have more facilities now then before, bank and government help more than before.
It was time when government did not print extra money or borrowed from IMF.
Scenario is quite comfortable then you can imagine


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