The firm found that the income to house price ratio has now more than doubled since the 1970s, putting would-be buyers in a difficult position when it comes to affordability.
House Buyer Bureau found that the average house price throughout the 1970s was around £9,277, the equivalent of £68,493 today after adjusting for inflation.
At this point average earnings were around £2,265, or £16,723 in today’s money, meaning an income to house price ratio of 4.1.
According to the study this ratio moved to 4.2 times income during the 1980s, and then dropped to four times income during the 1990s. However, it has been climbing consistently since then, hitting 6.4 times income during the 2000s and 7.1 in the 2010s.
It has got more challenging still for buyers in recent times, with the average house price this decade reaching £286,489. While average earnings have also grown, to £32,432, that still leaves borrowers looking at an income to house price ratio of 8.8, more than double what would-be buyers faced in the 1970s.
Chris Hodgkinson, managing director of House Buyer Bureau, said buyers have seen house prices “explode” over the last couple of decades, while earnings have failed to keep pace.
He continued: “As a result, they require over double the level of income to cover the cost of a home compared to their previous counterparts looking to purchase back in the 70s.
“As if this wasn’t bad enough, they’ve been further squeezed by high levels of inflation and the cost of living crisis in recent months and, as a result, are now paying through the teeth when looking to secure a mortgage due to interest rates hitting five per cent.”
The research follows figures from Fitch which found that mortgage affordability has dropped to its weakest levels since 2008.
