Average Londoner would have to save salary for 40 years to buy a home, ONS finds
The data is part of the Office for National Statistics’ new housing affordability index
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Your support makes all the difference.A low-income household in London could expect to spend 40 years of their salary when buying an average-priced home in the capital, a new index from the Office for National Statistics (ONS) has found.
The data, released on 28 July as part of the Housing Purchase Affordability in Great Britain 2021, also found that the average home sold in England for the financial year ending March 2021 cost the equivalent of 8.7 times the average annual disposable household income.
This number dropped to 6 in Wales, and 5.5 in Scotland.
The index found that £275,000 was the median house price for homes in England, and £31,800 was the median income.
In Wales, £176,000 was the median house price and £29,400 was the median income.
Scotland saw the median house price at £166,000 and median income at £30,300.
London housing was unsurprisingly deemed the most expensive, as the data found that low-income households in the North East could purchase an average-priced home for 12 years worth of their salary.
The data found that the affordability ratio in England is the worst it’s been since ONS began the series in 1999. Wales experienced its peak in 2007, while Scotland saw its highest ratio in 2008.
“The cost of homeownership is severely out of kilter with the reality facing many homebuyers when it comes to the money they earn, the amount they are able to save and the sums required to purchase a home,” managing director of property buying company HBB Solutions, Chris Hodgkinson, said.
“This has caused many have borrowed beyond their means while mortgage rates have remained favourable, simply to get a foot on the ladder. But with this cost of borrowing now starting to climb, we can expect to see those that have over committed find themselves in financial turmoil as they struggle to cover this increased cost on a below par level of income.”
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