An examination of UK house price affordability, and why despite the credit crunch, UK house prices are increasingly out of reach of a new generation of prospective home buyers.
Average income of mortgage borrowers. Source: ONS
The graph shows a significant rise in average incomes of those with mortgages.
- In 1990, the proportion of people with mortgages on income of over £50,000 was 2.5%. In 2011, the proportion of mortgages by people with income of over £50,000 was 40%.
- In 2011, only 6.8% of people with mortgages had income of less than £20,000. In 1990, 61% of people with mortgages had income less than £20,000
- There is a similar drop in the % of mortgages held by people under 30 years of age.
- Source: ONS House price index May 2012
Affordability of UK Housing
house-price-incomes UK. Source: ONS
- This data shows average house price to income ratios. It is based on the ONS mortgage survey.
- After peaking at a ratio of over 5.0 in 2007, there has been a surprisingly limited drop in the ratio of average house price to average incomes.
- The graph also shows that the average advance for buying a house has significantly increased. This is one factor in explaining why the average incomes of those with a mortgage has more than doubled in recent years.
