Rising house prices are increasing concern of affordability

Rising house prices are increasing concern of affordability.

Currently the biggest issue for first time buyers getting on the property ladder is affordability as house prices continue to rise and the amount required as a reasonable deposit increases. Nationwide found a property price increase of 8.8% over the course of 2013. Usually an increase in house price is welcomed as a positive thing, but not to the generation of young adults trying to get onto the property ladder. And because of this there is a whole new ‘Generation Boomerang’ of young adults having to live with their parents because they cannot afford a deposit or to rent.

House building is up on previous years but still not to the level required. Hand in hand the need for more housing, an increase in property prices and wages failing to keep up to pace with the housing market is showing increasing people priced out of the property market.

For example housing charity Shelter, measured house prices and wages as an average from 1997 – 2012 and found that the price of a home had increased from £75,762 to £253,816 and the average wage has increased from £16,500 to £25,932. If earnings had been raised at the same amount as house prices then the average salary would be £55,296.

Will we see a more affordable stable property market over the course of 2014? We will watch this space…