Housing market moves faster than earnings

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Housing market moves faster than earnings

Wed 2nd Feb 2005

Housing affordability continued to worsen in 2004 in all parts of the UK, as the cost of a mortgage

The Council of Mortgage Lenders annual review of market developments in the UK found that house prices rose by 13 per cent in England and Northern Ireland.

As a result, the average amount borrowed rose to almost three times the buyer's income, compared with 2.8 times income in 2003.

Wales and Scotland were worse hit, with house price rises of 28 per cent and 22 per cent.

"What emerges is a picture of contrasting trends in local markets, but the over-arching theme is one of growing affordability problems and a decline in the number of first-time buyers," commented Peter Williams, Council of Mortgage Lenders deputy director general.

The Council of Mortgage Lenders also revealed that all four countries in the UK saw a decline in the number of first-time buyers.

"One straightforward reform that the UK Government could implement to help improve affordability for first-time buyers wherever they live would be to raise the threshold for stamp duty in the forthcoming Budget," said Mr Williams.

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