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Becky Barrow
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House prices in England and Wales have reached an all-time record high of nearly £260,000, almost ten times higher than the average full-time worker’s salary, a report reveals today.
While their salary is £27,000, the price tag of the average home is £257,951, a widening gulf which is freezing a generation of young people off the property ladder.
For many parents, they are living in homes bought decades ago and now worth a fortune, but their grown-up children cannot afford to buy without help from the ‘Bank of Mum and Dad.’
House prices in England and Wales have reached an all-time record high of nearly £260,000, almost ten times higher than the average full-time worker’s salary, a report reveals today
The figures, from LSL Property Services, the estate agency giant, come as mortgage lending has risen to its highest level since the credit crunch struck seven years ago.
The Council of Mortgage Lenders said the number of loans handed out in January to buy a home was 48,600, the largest number in the month of January since 2007.
David Newnes, a director of LSL, which owns Reeds Rains and Your Move estate agents, said: ‘The housing market is firing on all cylinders.
‘2013 may have been the year when the market got back on its feet, but it seems to be this year when we’ll see it gallop onwards towards full health.’ In February last year, the average house price in England and Wales was £243,444. One year later, it has risen by £14,507 to a new record of £257,951.
The booming housing market comes amid concerns about the Government’s decision to intervene with the launch of its two Help to Buy schemes.
Both schemes help people to buy homes for up to £600,000 if they have only a small deposit of only five per cent of the property’s value.
The figures, from LSL Property Services, the estate agency giant, come as mortgage lending has risen to its highest level since the credit crunch struck seven years ago
Lord McFall, a leading Labour peer and former chairman of the Treasury Select Committee, said Help to Buy should be re-named ‘Help to Vote’.
Speaking at a conference at the think-tank Policy Exchange, he said the schemes ‘definitely need to be withdrawn because we don’t need to see a further surge in house prices.’
But the schemes are clearly boosting the chances of young people getting onto the housing ladder. Mortgage lending to first-time buyers jumped by nearly 40 per cent over the last year.
In January last year, 15,800 first-time buyers got a loan, compared to 21,800 in January this year.
Paul Smee, director general of the CML, said: ‘All parts of the market are open for business.’ The CML’s figures also show nearly nine in ten people who are taking out a mortgage are opting for a fixed-rate deal. In the past, it was a decision made by less than half of borrowers.
It is a sign of people’s growing anxiety about interest rates after the Bank of England has repeatedly made signalled that rates will inevitably go up.
It has been five years since the central bank halved the base rate to 0.5 per cent, the lowest level in its 320-year history.
The Bank’s deputy governor Charlie Bean said this week the first increase could take place in the spring, and that rates will probably rise to ‘a two to three per cent range’ over the next few years.
Comments (44)
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doggeek,
uk,
15 minutes ago
And you can only borrow 4 x your salary. It’s madness that prices are so high.
martin,
cranbrook,
18 minutes ago
History will repeat itself if there is no other show in town.
Mr Londoner,
Essex United Kingdom,
18 minutes ago
When wages gonna increase at the same ratio as house prices?
lagunamer cambridge,
cambridge, United Kingdom,
19 minutes ago
why are people obsessed with house prices and getting onto the property ladder…in the north houses are really cheap…in fact get a nice house and a commute to london if you earn enough…if not work out your priorities…i did..nice big house in a village with a good school..a lowly job but happiness for all…..grow our own fruit and veg….a couple of hens etc
Roger,
Bristol,
19 minutes ago
Unfortunately it’s supply demand which causes prices as with everything. There is a acute shortage of houses and apartments. The recession caused a small blip in prices as supply exceeded demand but due to the high influx of immigrants (demand) and the fact that the building industry has been decimated due to the recession (demand) we find the present situation. The only way to reduce prices is to either build or reduce population.
myview27,
Somerset,
21 minutes ago
STOP including London in the average house price!!! It’s totally different inside the M25 corridor and always has been!!! Take London out and the UK average house price drops significantly! £260k average house price….. No where near it !
Naushad Khan,
TN, India,
22 minutes ago
it is not new it’s the same for ever and everywhere, In most parts of the world except the wage earning laborers all the salaried class has to shell out ten times of their salary to buy a house according to their living and financial standards
purls,
Cambridgeshire, United Kingdom,
22 minutes ago
But its ok, it was harder in the 70/80s to get a mortgage………..grow up! Younger people today have got no chance with all the debts they have to pay, uni fees, high private rents, child care costs, how are they meant to save up!
chalky565,
derby, United Kingdom,
23 minutes ago
The average affordable house has been bought by a BuyToLet landlord so an affordable house is more difficult to find and that also puts up house prices.
redmen,
spion kop, anfield,
23 minutes ago
The Tories have built this mediocre economic recovery on a cosmetic housing boom!? Instead of sustainable economic factors! It will come tumbling down for sure, be warned house buyers!
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Average house costs ten times typical salary: Prices reach £260,000 as amount of mortgage lending reaches highest level since start of credit crunch
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