Homes are less affordable than ever as wages lag price growth

HOUSING is less affordable than ever before after wages failed to keep up with double-digit property price growth, figures show.

A buyer must now spend 8.5 times the typical salary of £38,600 to purchase an average home worth £327,691, according to lender Halifax.

House prices have risen by 88pc since 2011, when buyers had to spend 5.4 times their salary for a property with an average price tag of £174,082.

Today’s ratio of 8.5 is the highest ever recorded by Halifax.

Those buying in a city face a slightly lower ratio but still need to spend 8.1 times their salary, up from 7.5 in 2020 and 5.6 in 2011.

Average house prices in UK cities jumped 10.3pc to £287,440 in the 12 months to June, Halifax said.

Price growth in cities far outpaced salaries, which rose by 2.1pc. This stark difference has made city living less affordable than in previous years.

In Londonderry, the UK’S most affordable city according to Halifax, buyers must spend 4.7 times their salary to get on the property ladder.

The city in Northern Ireland was closely followed by Carlisle and Bradford with ratios of 4.8. Winchester is the least affordable city in the UK. The average property is £630,432, which is 14 times the mean salary of £45,059.

House price growth surged into double figures this year, propelled higher by a Covid demand for more space and a temporary stamp duty cut.

This means that one in five homes has gained more in value than the total average UK salary since July last year, according to recent research from property website Zoopla. More than 4.6m privately owned properties increased in value by over £30,500.