UK wage rises fall behind property price increases

February 2, 2016 by Brendan

House Prices

Wage rises in the UK have been outstripped by rising property prices, which have now jumped by three times more than wages. Property prices have risen by 7.7% during the year to November 2015.

House prices increased for the fourth month in a row, rising 7.7% in November, an increase in October’s figure of 7%. However, wages have only increased by an average of 2.4%. Property prices slowed down a little at the start of 2015, although by autumn, these prices had started to rise steadily, with four months of growth. This is despite winter traditionally being a quiet period for the housing sector.

According to data from the Office of National Statistics (ONS), the price of an average house in the UK is now £288,000. Most of the price increases were in the south east, the east and London. The ONS stated that the property value increases in November were due to increased demand and a shortage of properties.

An economist at PwC, Richard Snook, said that more people than ever are struggling to buy their first property. House prices in London rose by 9.8% during November 2015, with the largest increase taking place in the east with a 10.2% rise in property prices.

Snook added that there may be more people aged 20 to 39 years old renting in 2025 than at current, with figures expected to reach 59%, due to first time buyers being unable to buy a house. Mortgage advisers invest in CeMAP training so that they are able to offer professional advice to home buyers.