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Average earner needs £80,000 for typical London home

  • 04/11/2002
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The correlation between the average wage and the average house price has grown further apart. Acc...

The correlation between the average wage and the average house price has grown further apart.

According to personal finance website, the average wage earner in London would need a deposit of more than £80,000 to afford the average-priced house.

However, despite the national average house price rising by over 64% in the last five years in comparison to weekly wages going up by 26%, moneynet claims mortgages are now more affordable.

This is mainly due to falling interest rates which, despite a high of 7.5% in this five-year period, are now at 4%.

During this period, house prices have exploded with Greater London seeing an increase of 91%.

House prices in Scotland have seen an increase of 12.5% over the same period, although they have been tipped to rise sharply in the future by the Bank of Scotland (Mortgage Solutions, 21 October 2002 issue, page 5).


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