The UK housing market has reached its most unaffordable level in around 150 years, according to a new report by Leeds Building Society.
The study, which looked at the housing market over the past 70 years, found that the average house price in 1953 was £1,692, with the average salary at £333. In contrast, the average house price now stands at £294,329, with the average salary at £31,928.
The report highlighted that the housing market has been cyclical over the past 70 years, experiencing both rapid increases and falls in house prices.
The greatest increases in house prices were seen during the 1980s and over the last two decades. However, the report notes that the year which saw the greatest house price growth was in 1973, with an annual house price growth rate of 36%.
The report also revealed that the housing market is currently at its least affordable point in around 150 years. First-time buyers are particularly impacted, with a House Price to Earnings Ratio of 5.9, the highest it has ever been. Rates of home ownership among 25-34 year-olds have collapsed over the last 30 years, making it difficult for young people to get on the housing ladder.
Leeds Building Society estimates that the UK will require five million new homes over the next 15 years, an average of 340,000 a year. However, the average number of homes delivered each year over the last decade has been less than half of this figure.
Andrew Cook, Senior Economist at Leeds Building Society, said that while the housing market is underpinned by strong fundamentals, the government needs to address the drastic shortage in housing.
“Fixing the homeownership crisis is challenging and often controversial, but with enough political will, a decades-old problem can surely be overcome and would start to deliver on the homeownership aspirations of millions of people,” he added.
The report comes on the eve of King Charles III’s coronation on May 6th, with Leeds Building Society noting that the dream of owning one’s own home remains as strong now as it did when Queen Elizabeth II came to the throne in 1953.
