It may not feel like it for millions of young Britons struggling to buy a home, but government statistics show property has actually become more affordable.
Full-time employees in England and Wales could expect to spend an average of 7.69 times their annual earnings on purchasing a home, down slightly from 7.73 in 2019, the Office for National Statistics said Thursday.
The decrease is due to pay growing slightly faster than house prices. It will do little to ease the plight of those who are shut out of the market by more than two decades of rapidly appreciating values.
In the year to September last year, the median house price climbed to 243,000 pounds ($333,100), defying the deepest economic slump in three centuries. In 1997, the average was less than 60,000 pounds, the equivalent of less than 3.6 times earnings.
London and southeast England once again took the top spots for the priciest homes. The median value in Kensington and Chelsea stood at 1.27 million pounds last year, 36.4 times of the annual earnings of people who work in the borough.
The most affordable local authority was Copeland in North West England, where buying a home cost just 2.6 times earnings.
Separate figures from the Department for Work and Pensions showed that the median household income in the U.K. rose by four per cent in real terms in the year before the coronavirus pandemic struck. Absolute income poverty declined slightly.
But the Institute for Fiscal Studies, which analyzed the data, said income growth since the eve of the financial crisis has been feeble at just 0.7 per cent a year. Meanwhile, the strong growth registered in 2019-20 has almost certainly been brought to a "grinding halt" by the pandemic, it warned. - Bloomberg