You are here: Home - News -

Housing hits 30+ times salary for many

by:
  • 24/03/2017
  • 0
Housing hits 30+ times salary for many
The vast majority of UK workers have seen housing become less affordable over the last five years with just five occupations out of 304 seeing pay rises that outstrip house price inflation.

Despite substantial pay rises for those on or close to the National Minimum Wage, owning a home is becoming increasingly unrealistic, found Private Finance.

Meanwhile, eight job types saw home affordability drop by more than three years’ worth of salary.

Average house prices grew by 27% between 2011 and 2016, while wages grew just 9% across all UK employees.

Analysis of official statistics by Private Finance discovered the trends in home affordability by occupation type.

As Mortgage Solutions revealed last week, Office for National Statistics data showed the extent to which the housing market in England and Wales had become out-of-reach for many over the last 20 years.

 

Hard hit

PF-Housing-unaffordability-240317Bar staff were the hardest hit as they saw a negligible increase in their median gross pay and a resulting 7.3 years increase to 35 years to afford an average house. (Click graph to enlarge.)

Three of the five occupations with improved affordability still needed between 6.8 years and 11.5 years of earnings to match the average UK house price.

Even the biggest increase in affordability was just half a year’s salary in two job categories – electronics engineers and rubber process operatives.

For electronic engineers in 2016 it took 4.6 years’ salary to afford the average home (down from 5.1 years in 2011) and for rubber process operatives it was 6.8 years’ salary (down from 7.3 years).

 

Up and away

PF-Housing-affordability-240317Among the select group of jobs which had seen affordability improve, aircraft pilots and flight engineers have enjoyed the biggest five-year pay rise in cash terms of £22,507.

As a result, the average UK house price (£212,748 in 2016) amounted to 2.4 times their gross annual earnings of £89,317, down from 2.5 times in 2011 when they earned £66,810 and the average home cost £167,888.

Electronics engineers enjoyed the greatest percentage gain (40%) in their gross annual pay over five years across all UK occupations.

Shaun Church, director at Private Finance, said: “Barring a few exceptions, even the highest earning professions have not seen their annual pay keep up and aren’t immune to the limits this can place on movement in the housing market, particularly where larger purchases are involved. This is especially true of those working in city hubs where house price rises have far exceeded the average 27% over the last five years.”

 

 

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
'Have your say' sprayed on a wall
Fight the unfair FSCS levy – one week left to make your opinion count, says Copland

TMA mortgage club boss David Copland has sounded a rallying cry for brokers to fight for fairer treatment under FSCS...

Close