Wages Vs House Buying – Are You Being Priced Out?
The median price paid for property in England and Wales has increased 259% since 1997, data from the Office Of National Statistics shows.
The real story, however, is the fact that annual earnings have only increased by 68% in that period.
The following chart shows just how difficult it is to afford property, particularly if you are a first-time buyer.
A typical property is now 7.6 times the average earnings in England and Wales, which may mean a “housing crisis” for a generation of younger people.
However, for those who got on the property ladder at the right time, the stunning rise may mean a good opportunity to cash in.
With house prices outpacing earnings, Roger Harding of the housing charity Shelter is quoted in the Daily Mail saying housebuilding has failed an entire generation. “In the last two decades, house prices have been growing nearly four times faster than average wages because our broken system of building homes benefits land traders and developers rather than families.”
Alongside the Savings Gap, house buying is one of the biggest problems young people face today. Thinking about long term assets and investments could help younger people live a better life when they are older. Saving even a small amount could build up towards a helpful sum for future aspirations.
One thing you may want to consider is investing in an ISA. Check out our helpful blog on how investing in an ISA could help your financial aspirations.