House prices rise over six times average salary, says ONS

Adding to the woes of prospective first time buyers, the Office for National Statistics found that average house prices in England and Wales increased to over six times the average salary last year.

The average house price in England and Wales rose to 6.3 times over earnings in 2015, from 4.1 times the previous year, showing home ownership has become less affordable since 2002.

By 2015, the average price had increased nearly 90% since 2002, as the annual salary increased by just over 30%.

The ONS found that Westminster remained the least affordable place to buy a house, while Burnley overtook Blaenau Gwent in south Wales to become the most affordable area.

Meanwhile, social housing affordability has improved for the first time since 2007 following increases in average salaries which have increased faster than average rents.

However, there is a growing north/south divide in the private rental sector, as the 30 most affordable areas are mainly in the north of England, while 14 of the 15 least affordable areas are in London.

The cost of buying a house has increased by 6.4% or £12,500 in 2015, from the year earlier, to an average price of £207,500.

This was due to a 7% annual increase in England and 2% rise in Wales.

There is a significant gap in the average price for a property as it ranges from around £77,000 in Blaenau Gwent to nearly £1.2m in Kensington and Chelsea.

Nigel Henretty, head of housing analysis at the ONS, said: "Whilst social housing became more affordable in 2015, the cost of buying a house has continued to rise, increasing by 6.4% over the last year.

“However, mortgage repossessions are at their lowest levels in over a decade, helped by historically low interest rates.”

In 2015, the average salary was £22,578 with the highest salaries predominantly in London as all local authorities in London, except for Newham, had a higher average salary than England and Wales overall.

Average salaries ranged from £16,384 in Blackpool to £37,909 in Westminster, which is more than double that of Blackpool, with local authorities in which residents’ average salaries were higher than England and Wales overall were the areas that also had the highest average house price.