HOUSE PRICES STILL UNAFFORDABLE FOR THE AVERAGE EARNER DESPITE WAGE RISES

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HOUSE PRICES STILL UNAFFORDABLE FOR THE AVERAGE EARNER DESPITE WAGE RISES Nationwide

Houses are unaffordable says the UK’s largest Building Society – Nationwide, and added that despite the rise in wages across the UK and house prices falling since the record high in 2022, buyers aren’t able to bridge the affordability gap.

Buyers are finding that a greater proportion of their take-home pay is being allocated to mortgage costs, according to the lender’s House Price Index.

The proportion of average UK income taken to fund the average Mortgage has risen from 30% to 37%, even with a deposit of around 20% of the House Value.

Buyers have been earning more and House Prices have fallen by around 3% from two years ago, but rising mortgage costs mean buyers are still paying more.

Interest Rates have risen to 5.25% and Nationwide revealed that the average buyer able to give a 25% deposit would pay 4.7% interest on a five year deal, which has risen since 2021 from 1.3%.

Basic pay rose 6% on average in the three months to April, against the rate of inflation over the same period was 2.3%.  Due to this, the Resolution Foundation have calculated that Wages in real terms (after inflation) has risen by just £16 in 14 years of Conservative rule.

Compounding affordability problems is the fact UK house prices are back on the rise and were 1.5% more last month compared to June 2023.

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