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TODAY'S OTHER NEWS

House price growth outstrips incomes

House prices now cost six times income even in the most affordable regions of England and Wales as the affordability crisis worsens.

In London, the median average house now costs 12 times the average income, according to new research from The Guardian.

Its analysis of 19 million sales over 20 years from Land Registry and HMRC data shows dramatic increases in house prices in proportion to incomes in every region in England and Wales in the last 20 years.

This will fuel concerns that millions will be locked out of the UK property market.

In 1995, the average earner would have to spend between 3.2 times and 4.4 times their salary on a house, depending on where they live.

In 2012-13, the last year for which complete data is available, that had risen to between 6.1 times and 12.2 times average regional incomes.

The average London income in 1995 was £19,000 and the average house price was £83,000, or 4.4 times income.

By 2012-13, the average income had increased to £24,600 and the average house price had increased to £300,000, or 12.2 times income.

Prices have risen dramatically even in affordable regions.

In the North-East, the proportion of income spent on property has almost doubled in 20 years, increasing from 3.4 times the median income of the region in 1995 to 6.1 times the median income in 2012.

Fionnuala Earley, residential research director at estate agents Hamptons International, said house prices have completely outstripped income growth.

“The biggest factor is that in the run-up to the crash, interest rates were low, so you could afford to service a bigger mortgage then.

"There was also low inflation on essentials like food, fuel, transport and utilities, so people had more money in their pockets and were able to gear up for bigger mortgages.”

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