Buyers are faced with having to borrow more than six times their salary to buy a home, new figures have revealed.The findings by estate agent eMoov found that the average house price across the country is 6.05 times the average wage. It leaves some buyers wondering how they will ever buy a property as lenders typically only lend up to 4.5 times your salary.
The income multiple cap was imposed by the Bank of England amid concerns that borrowers were overstretching themselves and could risk being unable to repay their home loans.
The report suggested that the gap between the current average wage and the wage required for a general mortgage approval of 4.5 times salary is £6,111.
However, there are huge regional differences with the majority of the least affordable homes in London.
The exception is Purbeck in Dorset, which as an average earnings price ratio of 14.12.
Other areas listed in the 10 least affordable areas include Oxford at 13.18 times, South Bucks in Buckinghamshire at 13.08 and Hertsmere in Hertfordshire at 12.95.
Three Rivers in Hertfordshire, South Hames in Devon, Broxbourne in Hertfordshire, Christchurch in Dorset, Surrey's Epsom & Ewell, and Brighton & Hove in East Sussex also feature in the list.
|Rank||Location||Average Wage||Average House Price||House Price/Wage|
|9||Hammersmith and Fulham||£54,900||£771,882||14.06|
In London, Hackney tops the rankings of least affordable areas as the average house price in the area is £575,511, which is a staggering 17.03 times the average wage of £33,800.
It is followed by Brent at 16.37 times and Haringey at 16.21 times, with Waltham Forest, Ealing, Harrow and Barnet also featuring in the least affordable areas to buy a property in the capital.
The figures were calculated using the latest Land Registry house price data and combining this with the most up-to-date Office for National Statistics wage data.
The research also identified the most affordable areas, which all had price earnings ratios of less than five times salary.
They included Burnley in Lancashire, along with East Ayrshire and Inverclyde, which are both in Scotland.
Russell Quirk, chief executive of eMoov, said: 'When London is thrown into the spotlight in terms of the unaffordability of its property market, many are quick to highlight that the wages on offer are higher in the capital. However, this research shows that despite this, the gap between what hopeful London buyers are earning and what they are having to pay for a property is still way out of kilter and climbing.
'Not only this, but the reality gap between the average wage and wage required for mortgage approval is staggering. Of course, many of us buy with a partner or friend in order to get on the ladder, but even when sharing this burden there is still a considerable financial mountain to climb.
'It also shows that elsewhere around the nation there is almost a direct correlation between what a property goes for and the earnings on offer. But regardless of where you live and what you earn, there has been a serious unbalance between the escalating price of property and the stagnating wages available to UK buyers. This really needs to be addressed to help current and future UK buyers get a foot on the ladder and continue climbing it.'
Source: www.dailymail.co.uk 15/05/2017