Two out of five UK workers (38 per cent) earned less than the average home in the last 12 months, a new study by Post Office Money claims.
The Cost of Buying & Moving report, which was compiled by the Centre for Economics and Business Research (Cebr) found that average house prices rose by seven per cent – or £18,119 – over the last 12 months, while the average worker took home earnings of £26,426.
This means the average house in the UK effectively earned 69 per cent of the average worker’s salary over the last year. Workers needed to wait until 4 September last year, before their earnings pull equal with the annual increase of the average UK home.
A typical home’s earnings now nearly match the starting salaries of several professions including that of a graduate nurse, at £21,692, a teacher (£22,023), junior hospital doctor (£22,636), a police officer (£23,317), while they outpace that of a solider (£18,125), the study showed.
John Willcock, head of mortgages at Post Office Money, said:
“Although the rate at which property prices have increased has slowed compared with the dramatic rises seen in 2014 and early 2015, we have still see a big increase in prices over the last year. This has been driven by demand for housing outstripping supply, with the number of properties coming to market failing to match the needs of people looking to buy.
“While this is good news for those who already own their home and will see their property wealth increase, our study highlights the uphill struggle that buyers and movers looking to climb the property ladder continue to face, especially when attempting to get on that all-important first rung.”
Homeowners in the east, south east and London saw their home earn the most – with properties in each region earning £27,596, £29,690, and £46,276 respectively. Houses in the capital earned over £10,000 more than the average London salary of £36,109.