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Average earners would need a £23k pay rise to keep up with soaring house prices

February 25, 2014 10:58 AM

 “RURAL HOUSING CRISIS IS NOT ABOUT BUILDINGS, IT’S ABOUT PEOPLE” SAYS FARRON AT AFFORDABLE HOUSING EVENT Average earners in South Lakeland would need a £23k pay rise to keep up with soaring local house prices says local MP Tim Farron.

Average earners in England would need to more than double their annual salary just to keep up with out of control house prices, new research by Shelter shows.

To investigate how out of sync house prices have become, the charity looked at wage and house price inflation since 1997 in each area of the country. This was then used to calculate what average annual earnings would be if they had risen at the same rate as house prices.

The results are staggering. In South Lakeland, we were judged to be amongst the most expensive places in the North West. Families without children face a £46,330 gap between actual earnings and household inflated earnings. For couples with children it's £34,748 and for a single household it's £23,165.

The impact of the housing shortage has been widespread, with the latest Census showing a drop in homeownership in England for the first time since records began.

Meanwhile the gap between wages and house prices continues to grow. In the late nineties the average house cost five times the average salary, but by 2012 it had jumped to a massive ten times. This leaves thousands of people priced out of the property market and with no choice but to live in unstable private rented homes, or remain in their childhood bedroom well into adulthood.

Commenting, Tim said: "Housing is fundamentally about people and it's the people in rural areas that suffer the most. It's appalling that in significant parts of the UK, like ours, you need a salary of at least £100,000 to stay in the village you grew up in. And it's not just a few people - the problem is real, and it's widespread. I hope that these figures will help make our case for truly affordable homes easier to make.

"But we don't just need affordable homes, we need a mix, including social rents and council houses."

Campbell Robb, Shelter's Chief Executive, added: "When you'd need to more than double your salary just to keep up with rising house prices, it is no surprise that the dream of a home of their own is slipping further out of reach for a generation.

"Politicians need to start meeting people halfway by committing to bold solutions that will get more affordable homes built. Otherwise future generations will find themselves priced out of a stable home, however hard they work or save."