UK house prices’ growth over the last decade has vastly outsripped that of people’s salaries, with property value increasing in value nearly three times faster than the wages of their occupants, according to research.
The average UK home has risen around 43 per cent in value between 2008 and 2018, from £160,954 to £229,861. But over the same period the average salary has only increased by 15 per cent, from £24,606 to £28,860.
Had wages increased as fast as UK house prices over the period, the average salary would be £35,187 a year, according to research by mortgage broker Private Finance.
The firm’s managing director Simon Checkley said: “Property first and foremost provides a roof over your head and a place to call home; however, over the long term it can act as a lucrative investment.
“With falling mortgage rates making the cost of owning a home even more affordable, homeowners’ potential return on investment could be set to become even greater.
“Many homeowners will undoubtedly take comfort in the fact that over the past 10 years, as they’ve worked hard to earn an income, their home has essentially been doing the same – and arguably even more successfully.
“Though house price growth has slowed in recent years, it remains buoyant in many areas of the country, and has historically remained strong over the long-term.
People living in London and the home counties have been the biggest beneficiaries of the UK house prices trend.
For example, the average property price in Kensington and Chelsea has soared by 85 per cent over the decade, while wages have increased by just three per cent.
If homeowners in the borough had seen their wages increase to the same extent as the value of their homes, the average salary in the area would be £112,124.
As it stands, the average salary in Kensington and Chelsea is £62,088.