Property prices rise 3x faster than wages & National Park house prices soar
House prices have risen three times faster than wages over the past decade according to the National Housing Federation. Between 2001 and 2011 house prices have increased by an astronomical 94% on average but wages have only increased by 29%.
The average house price in England was £121,769 in 2011 with an average salary of £16,557 however, in 2011 the average property price was £236,518 which is a massive 94% increase but the average wage is only £21,330.
The largest gaps between property prices and wages can be found in two places, the first being Copeland in the Lake District where house prices have rose a gigantic 145% yet the average wage has increased a mere 5% over the past 10 years. The second location is Watford where the average house price has risen by 76% to £246,455 whilst the average salary has actually fallen by 13% to £15,272.
The amount home buyers have to pay for their deposit has also risen considerably over the past 10 years. A typical 90% mortgage required £12,177 deposit in 2001 which was around nine month’s worth of salary. However, in 2011 a buyer can expect to pay a 25% deposit at a staggering £59,129, almost three years worth of wages! In Copeland, a house buyer would have to fork out £32,000 for a deposit in 2011 where that deposit would have been a much smaller £5,000 in 2001.
The situation isn’t being helped by the fact that there is a lack of new homes being built. According to figures released from the Government, new builds are at a three year low between April and June. The news doesn’t improve if you are looking to rent a property because a tenant can expect to pay an average of £725 per month in July 2012 which is a 2.9% increase on July 2011.
If you fancy living in a National Park, where homes surrounded by beautiful and historic views I’m afraid the news doesn’t improve.
A study carried out by Lloyds TSB found that a typical home located within a National Park costs an average of £365,259, more than ten times the average annual earnings. This means a property in a National Park will cost almost £90,000 more than a home outside of a National Park.
The study also found that property prices in National Parks will continue to rise with a 55% increase already experienced over a ten year period in all 12 parks which were studied.
The most expensive National Park to purchase a property in is in New Forest with the average home costing £474,883 which is over 13 times the local average annual earnings. Another expensive National Park to purchase a property in was the Peak District where buyers paying an extra £162,650 which is double the typical property prices in the area.
However, on the opposite end of the scale, the most affordable National Park to purchase a property in is Snowdonia which would cost a buyer around £8,763 extra to live there than outside of the National Park. Other more affordable homes can be found in the Brecon Beacons and Pembrokeshire National Parks.
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