According to analysis from INTEREST by Moneyfacts, this is the “toughest burden since the 2008 financial crisis”.
The report noted that the average house price in 2000 was £78,000, approximately five times the average wage of £15,800, while in 2025, the average house price stood at £369,000 – equal to around seven times the average wage of £37,600.
This is well above standard lending caps, which are usually limited at around 4.5 times income.
The analysis found that since 2000, wages have risen by 237% but house prices have increased by 345%.
If wages had increased at the same rate as house prices over the period, then the average UK salary would be £54,000.
Mind the affordability gap
Sponsored by Newcastle for Intermediaries
The report noted that house price inflation has outpaced the rise in many other household goods, noting that if a loaf of bread had increased as much over the same period, it would be £2.28, while a dozen eggs would be £4.73.
An average homebuyer could save around £100 per month by securing around one of today’s two-year fixed rates at 90% loan to value (LTV), which are priced at 4.2% compared to June’s average of 5.12%.
This is still around 38% of gross monthly income, which is a similar level to what homeowners were paying back during June 2018’s average rates.
| Month/year | Average monthly
earnings (gross) |
Average house
price |
Moneyfacts average
mortgage rate |
Average monthly
mortgage payment |
% share of gross
monthly salary |
| Jun 2000 | £1,345.50 | £82,197 | 6.57% | £499 | 37.09% |
| Jun 2001 | £1,423.21 | £88,892 | 5.71% | £503 | 35.34% |
| Jun 2002 | £1,475.30 | £104,372 | 5.33% | £563 | 38.16% |
| Jun 2003 | £1,513.27 | £118,444 | 4.54% | £593 | 39.19% |
| Jun 2004 | £1,576.33 | £134,845 | 5.29% | £727 | 46.12% |
| Jun 2005 | £1,645.42 | £144,410 | 5.17% | £779 | 47.34% |
| Jun 2006 | £1,736.38 | £154,927 | 5.18% | £836 | 48.15% |
| Jun 2007 | £1,811.63 | £171,659 | 5.88% | £995 | 54.92% |
| Jun 2008 | £1,874.73 | £167,498 | 6.31% | £994 | 53.02% |
| Jun 2009 | £1,896.62 | £146,984 | 3.73% | £756 | 39.86% |
| Jun 2010 | £1,914.55 | £158,155 | 4.74% | £812 | 42.41% |
| Jun 2011 | £1,974.68 | £154,530 | 4.49% | £773 | 39.15% |
| Jun 2012 | £1,999.80 | £156,645 | 4.62% | £784 | 39.2% |
| Jun 2013 | £2,020.88 | £159,045 | 3.75% | £736 | 36.42% |
| Jun 2014 | £2,035.52 | £172,331 | 3.62% | £776 | 38.12% |
| Jun 2015 | £2,083.19 | £181,289 | 3.02% | £774 | 37.15% |
| Jun 2016 | £2,136.65 | £196,106 | 2.81% | £814 | 38.1% |
| Jun 2017 | £2,201.57 | £204,347 | 2.53% | £825 | 37.47% |
| Jun 2018 | £2,248.68 | £210,355 | 2.66% | £873 | 38.82% |
| Jun 2019 | £2,338.11 | £211,915 | 2.65% | £880 | 37.64% |
| Jun 2020 | £2,303.31 | £216,208 | 2.17% | £849 | 36.86% |
| Jun 2021 | £2,502.35 | £242,777 | 2.72% | £1,008 | 40.28% |
| Jun 2022 | £2,658.87 | £258,118 | 3.3% | £1,132 | 42.57% |
| Jun 2023 | £2,901.88 | £258,275 | 5.34% | £1,393 | 48% |
| Jun 2024 | £2,993.35 | £259,605 | 5.76% | £1,470 | 49.11% |
| Jun 2025 | £3,138.69 | £269,079 | 5.12% | £1,416 | 45.11% |
Source: Moneyfacts and Land Registry
Adam French, head of news at Moneyfacts, said: “Affordability may have eased a touch over the past 12 months, but buying a home in 2025 is still too much of a financial stretch for many. Putting aside the not inconsiderable tasks of affording rapidly rising rent costs and saving a sizeable deposit, monthly mortgage repayments are eating up almost half of gross earnings – the toughest burden since the 2008 financial crisis.
“Years of ultra-low borrowing costs, government incentives and a lack of housing supply have driven house prices far ahead of wages, leaving many buyers caught between high prices, expensive borrowing and strict lending rules. It all means that a typical borrower today will need to take a mortgage over a 50-year term to keep their repayments to a more affordable 35% of gross monthly income.
“There remains an acute risk that the market could overcorrect or overheat depending on the future path of interest rates, inflation and wage growth despite a recent softening of house price growth. We now need a period of stability where modest house price growth allows incomes to catch up so the market can return to more sustainable levels that benefit homeowners, homebuyers and the wider economy. In the meantime, it may mean holding rates where they are until inflation is in check is what is needed to nip another boom-and-bust cycle in the bud.”
