HOMEOWNERS in Chester have been warned the house price surge isn’t over although rates are likely to start to reduce when the cost of living crisis starts to bite in the Winter,.
The National Association of Property Buyers (NAPB) also estimate that house hunters will soon have to find up to TEN TIMES more than their annual earnings to afford a home, a leading property group has warned.
The NAPB say that despite a “flattening” of house prices people in many areas are still facing amounts well above what they earn.
The NAPB says that in London, the most expensive region, the average property is now worth £534,977 – which is 9.7 times more than wages in the city.
Their spokesman, Jonathan Rolande, warned: “We can expect to see people living in London and the south east facing prices which are ten times their annual salary by the end of this year.
“But this isn’t an issue restricted to those regions. Right across the UK house prices are continuing to rise at a far higher rate than wages. A dwindling amount of available homes is one reason. But we are also seeing a spike in graduate pay. This is leading to some properties at the lower end, which would traditionally be targeted at first time buyers, rising steeply in price as well. It’s a nightmare situation but just underlines the need to fast-track building programmes to ensure we have more homes on the market. Dwindling supply is killing off people’s chances of owning their homes. Tackling it is the only solution to this problem.”
Mr Rolande, who recently developed a price earnings calculator which showed just how big an issue house price inflation is, said there will also be a knock-on impact with rents.
“More and more people are having to wait longer until they can afford to buy a home which has made the rental market even more competitive,” he said.
“In many areas there are now people actually offering to pay above the levels a rental home is being advertised for just to secure a property. In other cases tenants are signing up for longer contracts than they might otherwise agree to.”
On claims that house prices are about to crash Mr Rolande added: “It’s too early to say that this will happen. It’s fair to say we have probably hit a peak in terms of house price rises but, having said that, there are still some regions where prices are rising albeit at a slower rate. We can expect to see a levelling off of house prices between July and October. The tipping point could come in the Winter when the cost of living crisis really starts to bite. The impact the squeeze will have on the property market should not be underestimated and we all need to brace ourselves for it.”
Mr Rolande’s comments come days after figures revealed the average UK home now costs more than seven times annual earnings.
Figures from mortgage lender Halifax show house prices rocketed by 16.8 per cent since the start of the pandemic, while wages crept up by only 2.7 per cent.
The average home is now worth £279,431, 7.1 times more than the typical annual salary, which is £39,402.
In England, the North-East is the most affordable area to buy a home as the average house price is £162,692 – around four times local income.
Inverclyde is the cheapest area in Scotland, where you need to spend just more than three times the average salary.
Overall, it takes 5.1 times your average salary to become a homeowner in Scotland, compared to the 7.1 UK figure.
