According to the Cost of Buying and Moving study, the average property gained £29,339 over the past 12 months, while the average worker earned £27,271. In London the average home gained £80,000 in the last year – almost twice the average annual salary paid in the capital.
The study, which was compiled by the Centre for Economics and Business Research, found that more than 60% of the population earned less than the average UK home over the year.
Property ‘earned’ more than the starting salaries paid in many core professions, such as a junior hospital doctor (£22,636), a graduate nurse (£21,388), a teacher (£22,023), a police officer (£23,317) and a solider (£17,945). London properties, which increased on average by £80,462, outstripped the average amount paid to a fully qualified doctor in the UK (£70,648).
John Willcock, head of mortgages at Post Office, said:
“Property prices have soared over the last year, following a long period of recovery – and are set to increase further over the next five years. Whilst this is good news for those that already own their home, our study highlights the struggle that buyers and movers looking to climb the property ladder face, especially in getting on that all-important first rung.”
The rate of house price increase has also accelerated. The average property gained £20,000 more this year than the year before (£29,339 compared with £8,954) as the market gained momentum. House prices grew 12% over the year, while average pay increased by just 0.6%.
Willcock added: “Forecasts indicate that this year’s strong house price growth will most likely be followed by a slight contraction of 0.8 per cent in 2015, as the market responds to the Mortgage Market Review (MMR) guidance. One of the impacts of MMR is a lengthening in transaction times and more rigorous criteria, meaning the overall process of buying and moving is taking longer.
“However, as demand for properties remains high those on the hunt for first homes and dream properties will continue to face substantial costs. Another factor contributing to this contraction is the decline in demand from overseas buyers which has affected house prices in the capital.”