Dreams of Home Ownership to Be A ”Distant Memory?”

17 November 2015

Earlier this week, the Daily Mail Online reported that the average cost of a home in the UK is 10 times higher than the average annual income of a full time worker, prompting those with dreams of ever having a home of their own to give up on it altogether. The article continues to state that while the average property is priced in the region of £284,000, the average wage per year stands at £27,200, according to the Office for National Statistics. The housing charity Shelter claims that this disparity is leading people to believe that owning a home is a ”distant memory”.

When it comes to buying homes for the first time, people have seen that the average cost of a new home is eight times higher than the average income, coming in at £215,000. In the capital, the picture is painted in an even more grim light, with the average cost peaking at £522,000, which is an astonishing 19 times higher than the national average wage.

In more statistical reports, homes around the UK have sky-rocketed as well. In the South East, £359,000 is the price tag for the average cost of a home, which is over 13 times higher than the average wage. In Wales, property prices are still 6.4 times higher than the average income of a person who works full time. And even in Northern Ireland, the cost of a home is recorded to be 5.5 times higher than the average yearly wage, the article goes on to mention.

The chief executive of Shelter, Campbell Robb, claims that these rises in housing prices are due to the Government’s ‘Help to Buy’ scheme which was rolled out in 2010. He states that the scheme was advantageous only for those who were ”well-off”, and he called for there to be a greater investment in affordable housing. He also said: ”If George Osborne is truly serious about turning the tide on this crisis, the upcoming spending review is his last chance to commit to investing in homes that people on ordinary incomes can actually afford to rent or buy.”

As a counter to this, the spokesman for the Department for Communities and Local Government stated: ”We want to ensure that anyone who aspires to own their own home can turn their dream into reality. Government initiatives have helped more than 230,000 people to buy since 2010, and we are delivering 200,000 new starter homes, which will be available to first-time buyers.” Other supporters of the scheme have also dismissed claims that there is evidence that house prices have increased exponentially in recent years.

However, academics have mentioned in the UK Housing Observatory report that London is on the brink of a housing ”bubble” which could ripple across surrounding areas. If housing prices continue to increase in the capital, we will also see an increase in other areas in the UK.