Gap between salaries and house prices widens

Kettering for sale and to let signs.'23/02/12
Kettering for sale and to let signs.'23/02/12
0
Have your say

The cost of buying a home in Northamptonshire has increased by more than three times the rate of an average salary over the past 10 years – leaving thousands of people with no hope of ever getting on the housing ladder.

National Housing Federation research found that in 2001 the average price of a home in Northamptonshire was £101,944, and the average salary was £16,458.

The federation states that in the space of 10 years the price of a home has rocketed to £178,530 – an increase of 75 per cent - whereas wages have risen just 20 per cent to £19,672, making buying a home increasingly unaffordable for millions of workers.

Overall, Northamptonshire has seen a 47 per cent increase in the gap between house prices and wages between 2001 and 2011. 1.

In Corby, house prices up by 118 per cent – from £60,594 to £132,381 – while wages have only increased by 9 per cent, meaning the gap between house prices and wages has risen 100 per cent between 2001 and 2011.

East Northamptonshire house prices have gone up by 90 per cent – from £98,927 to £187,827 – while wages have only increased by 19 per cent, meaning the gap between house prices and wages has risen 59 per cent between 2001 and 2011.

In Kettering, house prices have gone up by 84 per cent – from £82,740 to £151,876 – while wages have only increased by 18 per cent, meaning the gap between house prices and wages has risen 56 per cent between 2001 and 2011.

Wellingborough house prices have gone up by 81 per cent –from £86,627 to £156,892 – while wages have only increased by 16 per cent, meaning the gap between house prices and wages has risen 56 per cent between 2001 and 2011.

The federation also states that during the same period, getting a mortgage also got a lot harder, with the amount of deposit needed in Northamptonshire rising by 338 per cent. In 2001 the deposit for a typical 90 per cent mortgage was £10,194.

By 2011 the amount banks were willing to lend was less, and so the deposit needed for a typical 75 per cent mortgage leapt to £44,633.

Four of the five areas that have seen the greatest rise in the amount of deposit needed for a mortgage between 2001 and 2011 are in north Northamptonshire.

In Corby, the rise in the amount of deposit needed has gone up 446 per cent to £33,095 being required in 2011; in East Northamptonshire deposits required went up 375 per cent to £46,957 in 2011; Kettering has seen a 359 per cent rise to £37,969 in 2011; and in Wellingborough the deposit needed has gone up 353 per cent to £39,223 being required in 2011.

Chris Hobson, East Midlands lead manager for the National Housing Federation, said: “These shocking figures show that it is getting increasingly hard for thousands of people in Northamptonshire to buy a home of their own in the current climate.

“Corby is in third place out of a national top 10 for the greatest increase in the gap between income and house prices over the last ten years.

“With the gap between income and house prices having widened so substantially over the past decade, home ownership continues to be out of reach for ordinary families, and looks set to continue to be so for the foreseeable future.

“A shortage of homes means the price to buy them is being pushed ever higher by the market, and out of reach of millions of hard working families. Unless we start building more homes people can truly afford, to match the demand, this will only get worse.”