Average house price eight times average wage

The Local Government Association (LGA) has revealed that the average house price in now worth 7.72 times the average wage packet.

The LGA is calling for an urgent investment in house-building and infrastructure, urging the government to lift restrictions on council’s ability to borrow to invest in new housing. As part of its Budget submission, the LGA is also calling for councils to keep 100 per cent of their receipts from Right to Buy.

In 2000, the average house price was 3.96 times the average income, approximately half the current estimate.

The North East is the region with the closest gap between house prices and wages, but homes are still more than five times the average income The most expensive region of the country to buy a house is London, where the average house is almost 12 times the average salary, with the South East seeing the average house price nearly 10 times the average wage packet.

Martin Tett, the LGA’s Housing spokesman, said: “When house prices are almost eight times the average income, it’s clear that we have a serious shortage of affordable homes, which is shattering the dream of home-ownership for too many people. Councils are doing all they can to encourage housebuilding, by approving nine in 10 planning applications, but the fact is we’re hamstrung by restrictions on our ability to borrow to build. These must be lifted, so we can invest in the new homes our communities need.

“We also need to be able to keep 100 per cent of the receipts from homes we sell off under Right to Buy. Every penny is needed if we’re to trigger that renaissance in council house building that we need to help deliver genuinely affordable homes for our communities. Families around the country desperately need more affordable homes and more routes into home-ownership. A model of Right to Buy that actually allows councils to build more homes would vastly increase the opportunities for these families, without it the scheme will grind to a halt.”