Housing costs are increasing four times faster than wages

20 May 2015 Office for National Statistics show an annual housing prices increase of 9.6 percent, compared to just 2.2 percent for wages.

20 May 2015| News

20 May 2015

Office for National Statistics show an annual housing prices increase of 9.6 percent, compared to just 2.2 percent for wages.

It was recently reported that only those who earn £77,000 and above to buy a house in London; only extremely high-earners and those with inherited wealth can afford to own property.

While London is at the extreme end of the scale, the cost of housing across the country is rising fast, and it is not being matched by rising incomes.

But the problem is not just one for those that want to buy houses – the situation for those renting is dire. A consortium of charities including Crisis, Oxfam, Amnesty International, Save the Children and Unicef UK, have united under the organisation Just Fair to highlight the severity of the situation.

A report on housing published by Just Fair stated; “England is experiencing a housing crisis. Exceptionally high numbers of people are homeless, or vulnerable to homelessness. The current housing environment is characterised by profound issues of lack of supply, high and further increasing housing costs, lack of security of tenure, and homes of such poor quality that they are unfit for habitation. These issues plague all of England’s main housing tenure types: the owner occupied, the private rental, and the social housing sector. Housing insecurity affects not only people on low incomes, but broad swathes of the English population, who currently live in situations of insecurity and uncertainty”.

TUC General Secretary Frances O’Grady said:

“House prices are going up four times faster than people’s wages. No wonder mortgage approvals are falling and first-time buyers are struggling to save a large enough deposit. And we all know that housing bubbles burst and cause economic chaos.

“There is no sign the government yet understands the challenge of ending the housing crisis. Their headline policy is an incredibly unpopular plan to sell off social housing to the private market. This would reduce the supply of affordable homes when we should be adding to them as quickly as possible.”

ONS statistics on earnings for workers in continuous employment, also released this week, showed that in 2014 full-time employees experienced the lowest wage growth since 1997.

“With full-time wage growth the weakest it’s been since 1997 there is something very wrong with our recovery. Many of those who put in the hard work are simply not getting their fair share of growth. These official figures suggest the economy is sliding towards lower quality jobs with lower pay”, Frances O’Grady continued.

“The Chancellor’s plans for extreme cuts will only make things worse. We need a new plan for high productivity growth, based on investment in infrastructure and skills to create the better paid, secure jobs that people need.”

A KPMG-commissioned poll released earlier this month showed that 69% of people believe there is not enough housing in the UK that is affordable. 30% are concerned about how they will afford their home, whether homeowners or renters.

Housing charity Shelter say that 250,000 new homes need to be built every year to keep up with demand. Under the Coalition only 140,000 – almost half – were built per year.