Houses to cost 10 times income for next generation
The average property will cost 10 times the average income by 2026, even if the Government’s current targets for new homebuilding are met.
According to the National Housing Planning Advice Unit (NHPAU) a new body chaired by former Bank of England economist Stephen Nickell, far more properties need to be built than are currently planned to bring house price growth in line with reasonable long term trends.
In 2000 the average home cost four times earnings. That figure has now grown to seven times income and rising, as property price inflation continues to outstrip wage inflation.
NHPAU research claims that a third of younger people think they will never afford to buy a home, and 20% believe it will take the five years to save and earn enough to get on the property ladder.
Professor Nickell said: “First-time buyers have seen a big rise in the deposit needed to buy a home and
the amount of their income spent on mortgages.”
“Demand for housing is growing and unless action is taken, pressure on the
market will only get worse.”