You are here: Home - Uncategorized -

House prices outstrip earnings by record high – IMLA

Written by: Shekina Tuahene
The house price to earnings ratio measuring property affordability has reached a peak across the UK, suggesting getting on the property ladder has become harder than ever.


According to the trade body the Intermediary Mortgage Lenders Association (IMLA), the average price of a house in the UK surged to 8.8 times the average income. This was up from a previous high of 8.7 times in August 2007. 

IMLA’s report, The Mortgage Affordability Paradox, indicated that the UK continued to experience a housing affordability issue despite record low mortgage rates. 

It found that although mortgage interest and capital repayments reached a record low of 16.7 per cent of a homeowner’s income in 2020, first-time buyer numbers dropped.  

The association said that last year, there were 200,000 fewer first-time buyers in the market compared to previous data. 

Kate Davies, executive director at IMLA, said: “We speak often about the challenges that plague the housing market, but our latest report brings to light just how severe these are. Even with the costs of borrowing at relative lows, many aspiring homeowners will still struggle to step onto the ladder without the support of loved ones. 

“This paradox is something that we must all tackle to ensure the same opportunities that we have benefited from are made available to coming generations.” 

She added: “It’s certainly time for a rethink. We need a clear vision [on] how the many components of the housing and mortgage market pull together to boost housing supply, better keep house price growth at controlled levels, and, ensure safe borrowing practices.  

“Some time on from the peak of the pandemic disruption we would urge government to again place this high up on its ‘to do’ list.” 

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.

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

Your rights for refunds if travel is affected by strikes

There have been a wave of strikes this year across many different industries, and more are planned over Christ...

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.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week