Mancunians on an average wage would need more than double their salary to keep up with ballooning house prices, a recent study has revealed.
The research, conducted by the Greater Manchester-based housing charity, Shelter, looked at inflation rates for wages and property in the North West since 1997.
These figures were then used to work out how much people would earn if wages had risen at the same speed as house prices, with results showing a deep chasm between the two.
Manchester tops the disparity table, with actual average wages of £26,754 against housing-inflated earnings of £60,518 – a gap of £33,764.
Close behind is Trafford, with actual earnings of £25,007 compared to housing-inflated wages of £54,690, while Stockport, Bury, Rochdale and Salford all made it into the top 20.
Robb Campbell, chief executive of Shelter, called on politicians to implement policies which would enable more people to get a foot on the property ladder.
“When you’d need to more than double your salary just to keep up with rising house prices, it is no surprise that the dream of a home of their own is slipping further out of reach for a generation,” he said.
“The reality is that successive governments have failed to build the affordable homes that this country needs, and as a result our housing shortage has reached crisis point.
“Politicians need to start meeting people halfway by committing to bold solutions that will get more affordable homes built. Otherwise future generations will find themselves priced out of a stable home, however hard they work or save.”
Back in the late 90s an average house cost five times the mean annual salary. In 2012 it had vaulted to ten times the average yearly earnings.
In the same time-frame the number of homeowners in the northwest has dropped by 6%.
Lucy Powell, MP for Manchester Central, agreed with Mr Campbell’s view that an appropriate counter-action is to construct more housing that falls within the average person’s price range.
“Wages have not kept up with house prices and people are still finding it too difficult to buy a home – I hear this all the time from people in my constituency,” she said.
“The only solution to the house price problem is to build more affordable houses, yet under this Government house building is at its lowest level since the 20s.”
Angelique, 24, and her partner John, 29, are currently renting, but despite both earning a decent wage – Angelique is an engineer while John works as an IT manager – they are unsure if they will ever be able to purchase a house they can call their own.
“After rent, food and bills there’s very little left each month, which makes saving enough for a deposit impossible,” said Angelique.
“I always thought that if I worked hard and had a good job I’d be able to get a foot on the property ladder, but that’s just not the case these days. It feels like the only way we’d ever be able to afford our own place is if we won the lottery!”
Graham Stringer, who represents Blackley and Broughton, sympathised with the struggles of people to get on the property ladder.
“This country and the northwest in particular need more affordable housing, both to rent and buy,” he said.
“The fact that it is ten times somebody’s salary to buy a house means that most people have no chance.”
Shelter’s findings tie in with a data released in January this year which showed a 21% rise in Manchester house prices in 2013, compared to 8.4% nationwide, as reported by MM.
However, Salford’s presence in the disparity table jars with figures recently published by Lloyds Banking Group, which illustrated a 51% increase in house sales in the borough between 2012 and last year.
Image courtesy of Lizzie, via Wikicommons, with thanks.