The ONS annual ‘housing affordability’ statistics published today, show:
- A typical home in England now costs a staggering eight times the annual earnings of the average full-time worker. And for workers on a lower income, the gap between average house prices and wages is even more dramatic at 11 times.
- In the last five years, every region of England has become less affordable. Predictably, housing affordability has worsened the most in London, where average house prices have risen six times faster than earnings. But the capital is closely followed by the East and South East of England where they’ve risen more than four times as fast as wages (see Figure 1).
- Decades of failure to build enough homes have led to house prices rocketing by 268% in the last 20 years (from £65,000 in 1998 to £239,000 in 2018) while average annual earnings grew by just 69% (from £17,709 to £29,872). So it’s hardly surprising that the number of private renters has nearly doubled over the same time period, from 10.3% to 19.5% of all households, as homeownership has slipped further out of reach.
Polly Neate, chief executive at Shelter, said:
“Today’s figures leave us in no doubt that owning a home is an all-but-impossible dream for millions of working families. Combined with the dire lack of social homes, this has left huge numbers of people with no choice but to rent privately.
“It cannot be right that so many families, especially those on lower incomes, now face a lifetime in deeply unstable private renting, where they’ll have to pay well over the odds to keep a roof over their head.
“More families desperately need the option of social housing, and they need it now. To make this a reality, the government must back our call for 3.1 million more social homes over the next 20 years. Only by doing this will we solve our housing crisis, and finally give people the chance of a truly stable home.”