ONS Warns Average Home in England Now Unaffordable

ONS Warns Average Home in England Now Unaffordable.

The data indicates that only the wealthiest 10% of the population can afford to purchase a home, as the average household requires 8.6 times its disposable income to satisfy the asking price.

The latest official statistics reveal that only the wealthiest 10% of households in England possess the financial means to purchase an average-priced home, underscoring the severity of the country's dysfunctional housing market.

The Office for National Statistics emphasized that the persistent rise in house prices has significantly outpaced the growth of household incomes over the past several decades. Consequently, the agency declared that homeownership has become “unaffordable” across all regions of the UK, with the sole exception of Northern Ireland.

According to the report, acquiring an average-priced home, which was valued at £298,000 last year, would require approximately 8.6 years of the average annual disposable income in England, estimated at £35,000. This figure is nearly double the ratio observed in 1999.

The corresponding ratios were recorded at 5.8 in Wales, 5.6 in Scotland, and 5 in Northern Ireland, where the typical property is barely deemed accessible for the majority of families. The Office for National Statistics (ONS) characterizes affordability as a local average house price that is less than five times the local average income.

Based on this criterion, it was indicated that only households with disposable incomes of at least £69,677—placing them within the top 10% in England—could be regarded as reasonably capable of affording an average-priced home in the country.

In Wales, this standard applied to households in the top 30%, while in Scotland, it pertained to the top 40%. Only in Northern Ireland was an average-priced home deemed affordable for a household with an average income.

In London, where property prices have surged significantly over the past twenty years, even numerous households within the top 10% of local earners—those with disposable incomes of at least £89,901—find themselves unable to purchase an average-priced home in the city.

Last year, the average property in London sold for approximately £530,000, which corresponds to 14.1 years of the average income. For individuals in the top 10%, it would require 5.9 years to acquire an average property, whereas those in the lowest 10% would need 34.7 years.

These statistics highlight the difficulties faced by Keir Starmer’s government, which has pledged to significantly enhance the availability of new housing in order to address the housing crisis in Britain, setting an ambitious goal of constructing 1.5 million homes in England before the conclusion of this parliamentary term.

The Prime Minister reiterated the objective last week as he aimed to revitalize Labour's governmental agenda, although he conceded that the initiative to increase housing starts was "ambitious, perhaps a bit too ambitious."

Labour has been advised that it may fall short of its manifesto goal unless it implements more radical reforms to the planning system and revives large-scale social housing projects reminiscent of the postwar era. Additionally, some experts caution that merely increasing the housing supply is unlikely to significantly enhance affordability.

Data from the Office for National Statistics indicates that average home prices throughout the southern region of England are beyond the reach of all but the top 10% of highest-income households. Even in the most affordable region, the north-east of England, average prices are only deemed affordable for those within the top 40%.

The ongoing housing crisis in the UK reveals an alarming trend: home ownership has become increasingly out of reach for the majority of people. With average home prices soaring far beyond income growth, only the wealthiest 10% of households can afford to purchase a typical property.

This growing disparity highlights the failure of current policies and the worsening affordability gap. Even ambitious plans to build more homes may not be enough to reverse this trend unless radical changes are made to the housing system. Without comprehensive reforms, many will continue to be excluded from the dream of owning a home.

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