With house prices continuing to creep up and up, in an ideal world it would be lovely if wages also increased at the same rate… however, research released by the Office of National Statistics has highlighted that this is very much not the case.
House prices have risen five times faster that weekly earnings in the past five years, increasing by 36% since April 2011, compared to just a 7% rise in earnings in the same time period.
As property prices continue to rise, it is clear that more and more people are struggling to meet the more stringent requirements set out by mortgage lenders, save heftier deposits, and commit themselves to expensive monthly mortgage payments, and as such, we have seen a down turn in home ownership rates across the UK.
The amount of people on low and middle incomes who own their own properties have fallen from 70% to 55% in the last decade, according to The Resolution Foundation, whilst the amount of people living in private rented accommodation has doubled to 27%.
In London, when property prices are at a premium, the situation is even more extreme. Property prices are now 57% more expensive that it was in 2011, and wages have actually had a slight decline.
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