Average worker needs to earn £29,000 more to own a home

The average wage of workers in England would need to be increased by £29,000, and by £100,000 in areas of London, to keep up with soaring house prices, research by housing and homelessness charity Shelter has determined.

To investigate how out of sync house prices have become, the charity looked at wage and house price inflation since 1997 in each area of the country.

This was then used to calculate what average annual earnings would be if they had risen at the same rate as house prices.

In the London borough of Hackney, the average annual salary would need to increase by over £100,000 to be in line with the astronomical increase in house prices.

The shortage of affordable homes means that people on average wages in Watford and Brighton & Hove would need an extra £47,000 each year to keep up with local house price inflation, and in Manchester £34,000 extra would be needed.

It found that there is not a single area in the whole country where wage and house price inflation have remained aligned.

Burnley has the smallest gap, but here £10,000 would still need to be added onto the average salary to put it in line with the rise in house prices.
The impact of the housing shortage has been widespread, with the latest Census showing a drop in homeownership in England for the first time since records began.

Meanwhile the gap between wages and house prices continues to grow. In the late nineties the average house cost five times the average salary, but by 2012 it had jumped to a massive ten times. This leaves thousands of people priced out of the property market and with no choice but to live in unstable private rented homes, or remain in their childhood bedroom well into adulthood.

The charity is warning that if house prices are left to rise further this will not only price out future generations hoping for a stable home, it will also makes things even harder for the thousands of families already struggling to keep up with their high housing costs each month.
Shelter is calling on the government to address the serious shortage of affordable homes as a matter of urgency, and give young people and families who work hard and save money each month the chance of a stable home.