Typical UK home now “too expensive” for average Brit

The UK’s inflated property market is becoming increasingly unsustainable, experts warn.

In just ten years the average property price in the UK has risen from £186,000 to £288,000 – a 55% increase that is becoming increasingly unsustainable, experts warn…

Data published this week by the Office for National Statistics revealed that the average valuation for homes in the UK stood at just below £300,000, with the 55% price increase over the past decade nowhere near matched by rises in average incomes.

As a result, the housing market in the UK is becoming increasingly unaffordable for the average Brit – and things are going to get worse before they get better, critics warn.

“If we don’t see housing reform soon, in another 10 years the gap between house prices and earnings may have become truly impassable,” said Jan Crosby, head of housing at accountancy firm KPMG.

Over the past 12 months, property values in the UK have risen by 6.7%. During that same period, wage growth has been a mere 0.3%.

In contrast, although property prices in Spain are once again on the rise – increasing 6.6% in 2015 – they are still some 28% below the pre-crash heights of 2007. In Britain, home prices now are one-fifth higher than in 2007.

“We expect house prices to rise by around 6% over 2016 amid healthy buyer interest, which could well be fuelled by increased expectations that interest rates will not rise this year, and a relative shortage of properties,” added IHS Global Insight analyst Howard Archer.

In Spain, things look much healthier when viewed from a buyer’s perspective. In addition to the steady price increases, the number of transactions has also risen, with 11.1% more properties sold in 2015 than there were in 2014, according to notary data released this week.