House Prices 'To Reach Ten Times Pay'
SkyNews - Thursday, June 7 04:19 am
The next generation of homebuyers could face average house prices that are 10 times their salaries unless the number of homes being built increases, an independent housing body has warned.
Research from the newly-established National Housing and Planning Advice Unit (NHPAU) found that more than a third of non-homeowners think they will never be able to buy.
A further fifth believe it will take them at least five years before they are in a position to take their first steps on the property ladder.
Their pessimism comes as the typical price of a home in the UK continues to outstrip salary increases.
Government figures show that in 2000 the average cost of a home was four times annual earnings.
Steep house price hikes meant that by 2006 the typical homebuyer was looking at a home that was seven times his or her salary.
The NHPAU predicts that this is set to rise again unless supply increases.
By 2026 it estimates that house hunters will be faced with average prices 10 times their yearly earnings.
Professor Stephen Nickell, chair of NHPAU and former Bank of England Monetary Policy Committee member, 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."