Home Affordability in 2017
How affordable is the housing market in 2017?
House prices in the UK have fallen for three consecutive months for the first time since 2009, so now could be the best time to sell your house – and fast, before the value of your home decreases further.
New data released reveals the home affordability gap – the gap between median house price and median earnings – and suggests that we may have seen house values peak for the foreseeable future, as the gap between house prices and earnings closes.
According to ONS affordability data, the median price paid for a home in the UK leapt 259% between 1997 and 2016, while earnings rose by only 68%.
In 1997, house prices were 3.6 times workers’ annual gross full-time earnings. Now, prices are 7.6 times the average salary.
Of course, the extent of the gap varies across regions. In the London boroughs of Kensington and Chelsea house prices are typically 38.5 times greater than average earnings, while in Copeland, Cumbria, houses are typically 2.8 times the average salary.
So, what does the drop in house prices mean if you’re trying to sell your house? And where’s the link between this and affordability?
Basic economics suggests that when you make something less affordable, demand falls. That’s how a market balances out. This could well be why prices are on the decrease and could mean your house is on the market for longer.
So why wait? We buy homes all year round! If you think we could help you to sell your home, visit our homepage and enter your postcode for an instant cash offer.