House prices skyrocket to 6 times average salary with largest increases in London
It's a huge increase from 2002, when a house cost just 4 times the average salary
HOUSE prices last year soared to 6.3 times average earnings, a report from the Office of National Statistics (ONS) revealed yesterday.
This was a huge rise from 4.1 times average earnings in 2002.
In 2015 the average (median) house price in England and Wales was £207,500, up a whopping 6.4 per cent (£12,500) since 2014.
This rise was largely driven by the seven per cent annual increase in England - while in Wales the annual increase was two per cent.
The ONS figures also revealed a huge North/South divide in the private rental market, with 30 of the most affordable areas mainly in the north of England.
While 14 of the 15 least affordable local authorities were located in London.
Between 2014 and 2015, London had an average median house price increase of 9.6 per cent, whereas there was an average increase of 5.5 per cent in the North East of England.
While for the first time since 2007, the affordability of social housing has improved following increases in average salaries which have risen faster than average rents.
Nigel Henretty, Head of Housing Analysis at ONS, said: "Whilst social housing became more affordable in 2015, the cost of buying a house has continued to rise, increasing by 6.4 per cent over the last year.
"However, mortgage repossessions are at their lowest levels in over a decade, helped by historically low interest rates.”
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Separate Halifax figures released yesterday show a house price slowdown, with growth at around half the yearly rate compared to six months ago.
Property values in September were up by 5.8 per cent annually - compared with a 10 per cent rate of annual price growth recorded just six months earlier in March.
Halifax said September's 5.8 per cent yearly growth rate was the weakest recorded since August 2013.