Only the richest 10% of households can afford to buy an average-priced home in England, according to official figures that lay bare the scale of Britain’s broken housing market.
Highlighting the result of decades of house price growth that has outstripped household incomes, the Office for National Statistics said the cost of buying a home was “unaffordable” in every part of the UK except Northern Ireland.
It said it would take as many as 8.6 years of average annual household disposable income in England, of £35,000, to afford an average-priced home, worth £298,000 last year. That is almost double the ratio recorded in 1999.
The equivalent ratios were 5.8 in Wales, 5.6 in Scotland and five in Northern Ireland, where the average property is only just considered within reach for most families. The ONS defines affordability as a local average house price costing less than five years local average income.
On that basis it said only households with disposable incomes of at least £69,677 – placing them within the top 10% in England – could be considered reasonably able to afford an average-priced home in the country.
In Wales, this applied to households in the top 30%, and in Scotland for the top 40%. Only in Northern Ireland was an average-priced home affordable for a household with an average income.
In London, where house prices have rocketed most in the past two decades, even many households in the top 10% of local earners – with disposable incomes of at least £89,901 – would not be able to afford an average-priced property in the capital.
An average home changed hands in London for about £530,000 last year, equivalent to 14.1 years of average income. For those in the top 10%, it would take 5.9 years to buy an average property, while it would take 34.7 years for those in the bottom 10th.
The figures exposed the challenge for Keir Starmer’s government after it promised to drastically increase the supply of new homes to tackle Britain’s housing crisis, having set a target to build 1.5m homes in England before the end of this parliament.
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The prime minister last week reiterated the target as he sought to relaunch Labour’s agenda for government, although he acknowledged that the plan to drive up housing starts was “ambitious, a little too ambitious, perhaps”.
Labour has been told it could miss the manifesto target without more radical changes to the planning system and the rebirth of postwar-style social housebuilding projects on a huge scale. Some experts also warn that increasing the housing supply is unlikely to drastically improve affordability.
The figures from the ONS show average-priced homes across the entire south of England are unaffordable to all but the top 10% highest-income households. Even in the most affordable area – the north-east of England – average prices are only considered affordable for those in the top 40%.
