There is only one borough left in the UK in which property is deemed “affordable”.
This is according to a new study by the TUC, which found that the borough of Copeland, home to the Sellafield nuclear site, is the only place in which the average home costs less than three times the average salary.
The survey found that five out of every six local authorities now has an “affordability ratio” of more than five – meaning that the average property costs more than five times the average annual salary.
According to the TUC’s figures, affordability ratios have increased dramatically since 1997. During that year there were 72 local authorities with an affordability ratio of less than three, and 213 with a ratio of between three and five. Today there are one and fifty respectively.
In June the Bank of England announced that, from October, only 15 per cent of mortgages would be permitted to exceed 4.5 times the borrower’s income. The Bank insists that the move is necessary amid concerns around rising debt levels, but the move will put more homes out of the reach of much of the population.
Rising house prices and stagnant wages have pushed more people into the private rented sector. Separate research from the Resolution Foundation and the Chartered Institute of Housing suggests that there are now four million households in the sector.
The average house price across the UK reached £189,306 in August, following a 0.8 per cent increase during the month.