You are here: Home - Mortgages - First Time Buyer - News -

Housing hits 30+ times salary for many

0
Written by: Owain Thomas
24/03/2017
The vast majority of UK workers have seen housing become less affordable over the last five years with just five occupations out of 304 seeing pay rises that outstrip house price inflation.

Despite substantial pay rises for those on or close to the National Minimum Wage, owning a home is becoming increasingly unrealistic, Private Finance has found.

Its analysis looked at the trends in home affordability by occupation type and it found eight job types saw home affordability drop by more than three years’ worth of salary.

Average house prices grew by 27% between 2011 and 2016, while wages grew just 9% across all UK employees.

It comes just a week after the Office for National Statistics (ONS) data showed the extent to which the housing market in England and Wales had become out-of-reach for many over the last 20 years.

Hard hit

PF-Housing-unaffordability-240317Bar staff were the hardest hit as they saw a negligible increase in their median gross pay and a resulting 7.3 years increase to 35 years to afford an average house. (Click graph to enlarge.)

Three of the five occupations with improved affordability still needed between 6.8 years and 11.5 years of earnings to match the average UK house price.

Even the biggest increase in affordability was just half a year’s salary in two job categories – electronics engineers and rubber process operatives.

For electronic engineers in 2016 it took 4.6 years’ salary to afford the average home (down from 5.1 years in 2011) and for rubber process operatives it was 6.8 years’ salary (down from 7.3 years).

Up and away

PF-Housing-affordability-240317Among the select group of jobs which had seen affordability improve, aircraft pilots and flight engineers have enjoyed the biggest five-year pay rise in cash terms of £22,507.

As a result, the average UK house price (£212,748 in 2016) amounted to 2.4 times their gross annual earnings of £89,317, down from 2.5 times in 2011 when they earned £66,810 and the average home cost £167,888.

Electronics engineers enjoyed the greatest percentage gain (40%) in their gross annual pay over five years across all UK occupations.

Shaun Church, director at Private Finance, said: “Barring a few exceptions, even the highest earning professions have not seen their annual pay keep up and aren’t immune to the limits this can place on movement in the housing market, particularly where larger purchases are involved. This is especially true of those working in city hubs where house price rises have far exceeded the average 27% over the last five years.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
A row of terraced houses overlooks a view of London
London drags down city level house price growth

House price growth is down 1.4% from last year at a UK city level.

Close