House prices increasing faster than salaries, survey finds

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2nd February 2016 15:53 - Housing

According to the latest official data, house prices increased at a faster rate in November 2015, than October 2015 and far surpassed the increase in wages within the last year.House prices increasing faster than salaries, survey finds

The data from the Office for National Statistics showed that there has been a 7.7 per cent increase in house prices for the 12 months to November 2015, which is more than triple the most recent 2.4 per cent increase in average income.

Over the last 12 months, house prices in the United Kingdom have increased by around five to six per cent. The most recent estimations from Your Move and Right move, the average house price in England and Wales is £290,000.

With the cost of housing increasing at a faster rate than that of the average salary, potential buyers are being forced to pay record-level prices to secure a property. To illustrate this, PricewaterhouseCoopers said in the Telegraph that the vast majority of those under 40 will be forced out of the housing market in the next 10 years. However, the amount that first time buyers have paid for a property has increased at a slower rate than the rest of the market, at 7.4 per cent.

In November 2014’s Autumn Statement, Rightmove said that the sales of smaller houses had increased on the back of further tax changes for buy-to-let investors, which in turn, caused the price increased for buy-to-let properties virtually zero.

The data from the Office for National Statistics also revealed that in the East of England, London and the South East saw a spike in increases, with 10.2 per cent and 9.8 per cent. On the other hand, the North East and Scotland saw the slowest level of growth, with just 0.4 per cent.

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