True cost of housing reaches record breaking high

Housing affordability is at its worst in decades, according to new research.

According to House Buyer Bureau, today’s homebuyers have by far the toughest financial task when it comes to housing affordability – with house prices sitting at 8.8 times the average earnings.

The research reveals the average house price throughout the 1970s sat at just £9,277, the equivalent of £68,493 today after adjusting for inflation.

House prices explode over the last decade

Although the average home may have been significantly more affordable when compared to the current market, the average earnings were also far lower at £2,265 or £16,723 after adjusting for inflation.

The average home during the 70s required 4.1 times income.

Managing director of House Buyer Bureau, Chris Hodgkinson, said: “You have to feel for today’s homebuyers who have seen house prices explode over the last decade or two, in particular, while the earnings on offer to them have failed to keep pace.

“As a result, they require over double the level of income to cover the cost of a home compared to their previous counterparts looking to purchase back in the 70s.”

Homebuyers paying through their teeth when looking to secure a mortgage

Homebuyers today have never had a harder task when looking to climb the property ladder.

This decade have seen the average house price hit £286,489, 318% higher than the average seen throughout the 70s. While the average earnings have also increased to £32,432, this marks just a 94% increase in earnings.

Mr Hodgkinson added: “As if this wasn’t bad enough for homebuyers, they’ve been further squeezed by high levels of inflation and the cost-of-living crisis in recent months and, as a result, are now paying through their teeth when looking to secure a mortgage due to interest rates hitting 5%.”