House price growth outstrips wages in 90% of England and Wales
House price rises outstripped wage growth in more than 90% of England and Wales last year, according to official data that prompted talk of a possible full-blown “affordability crisis”.
The Office for National Statistics (ONS) said house prices grew faster than earnings in 91% of local authority districts in 2021.
It added that in England a home typically cost an average of 9.1 times earnings – up from 7.9 times earnings in 2020. In 1997 the figure was around 3.5.
The data comes in the wake of multiple surveys indicating that, two years on from the start of the coronavirus pandemic, the housing market has been continuing to defy economic conditions. Earlier this month, the Halifax said UK house prices were rising at their fastest rate since 2007.
The ONS said housing affordability had worsened in 300 out of 331 local authority areas during 2021. It added that in England average property prices increased by 14% in 2021, while average earnings fell by nearly 1%.
Some may be surprised to learn that affordability has “significantly improved” in two of the capital’s priciest locations: the City of London and Westminster. In the latter borough, the house prices to earnings ratio fell to 18.9 times earnings. In 2018 it was almost 25.
Kensington and Chelsea in west London remained the least affordable local authority area in England and Wales, with average house prices estimated at 36.5 times the typical annual wage.
The jump from 7.9 times to 9.1 times earnings was described as a statistically significant increase. However, the ONS acknowledged that the earnings data included payments to workers who were furloughed during the pandemic. It said its figures were based on actual payments made to employees from company payrolls and that
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