Mind the gap
House prices race way ahead of salaries
THE average home now costs a whopping 7.6 times what a typical worker earns in a year.
Figures out yesterday from the Office for National Statistics reveal the impact rocketing property prices have had over the past two decades.
In 1997, the average gap between house prices and earnings was 3.6 times.
Since then, property values across England and Wales have leapt by 259% but wages have risen by a more modest 68%.
According to the ONS, the average property changed hands for just over £215,000 last year, while the average annual salary was £28,336.
The ONS said: “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.”
In the posh London Borough of Kensington and Chelsea, home to mega-rich Tamara Ecclestone and Stella McCartney, the average property costs just under £1.2million.
That’s a staggering 38.5 times more than the £30,522 average annual wage for someone who works there.
The wage figure takes in people who travel in from other areas but doesn’t include other forms of income.
The most affordable area last year was Copeland in Cumbria, where the average home (£121,500) cost 2.8 times the average annual salary in the area of £43,490.
That wage figure is believed to be relatively high because of the large number of well-paid workers at the Sellafield nuclear power plant in the borough.
The findings will add to concerns about the impact of buyers having to lumber themselves with every bigger mortgages to get on – or up – the property ladder.
It means others may never afford their own pad.