London median house cost, 12 times median income
A new report says the gap between income and house prices in UK has been widening over the past 20 years.
The gap is so much that even buyers in the most affordable regions in UK and Wales have to spend six times their income. The situation is most dire in London where the median house costs 12 times the median income.
The report by The Guardian is built on analyses of 19 million sales over 20 years from Land Registry and HMRC data.
According to The Guardian, “the homebuyer earning the median salary for their region in 1995 would have had to spend between 3.2 times and 4.4 times their salary on a house, depending on where they lived. In 2012-13, the last year for which complete data is available, the median house price had risen to between 6.1 times and 12.2 times median regional incomes.”
“Even in more affordable regions, prices have risen dramatically. In the north-east, the most affordable region in England and Wales, the proportion of income spent on property has almost doubled in 20 years, increasing from 3.4 times the median income of the region in 1995 to 6.1 times the median income in 2012,” the report said.
Now Ian Williams, senior analyst from Foreign Policy in Focus warns about the social consequences of the trend.
In an interview with Press TV, he said increasing houses prices exacerbate the social and geographic divide in Britain.
The gap has put UK in the category of countries where houses appear overvalued but prices are rising” The Organisation for Economic Co-operation and Development has warned that economies of this category including Canada, Australia and New Zealand are vulnerable to the risk of price corrections.
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