House prices rise by five times as much as wages in Hertfordshire
PUBLISHED: 13:00 27 August 2012
HOUSE prices in Hertfordshire have soared five times as much as incomes over the last decade, new research has shown.
The research found that in 2001, the average price of a Hertfordshire home was £173,202 and the average salary was £18,470.
In the space of ten years the price of a home has rocketed to £312,786 – an increase of 81 per cent - whereas wages have risen just 16 per cent to £21,403, making buying a home increasingly unaffordable for thousands of workers.
Watford saw the biggest drop in affordability across the whole of the East of England and the second biggest drop nationwide – Welwyn Hatfield and Hertsmere were fifth and seventh in the county respectively.
Nationally, the average house price rose by three times the rate of average income.
The statistics showed how deposits had also soared.
In 2001, the deposit for a typical 90 per cent mortgage (available in 2001) in Hertfordshire was £17,320 - just less than one year’s salary.
But by 2011 the amount banks were willing to lend was less, and so the deposit needed for a typical 75 per cent mortgage leapt to £78,196, nearly four years’ salary.
The National Housing Federation’s Kate Dodsworth said: “These shocking figures show that it is getting increasingly difficult for thousands of people in Hertfordshire to buy a home of their own in the current climate.”
Housing minister and Welwyn Hatfield MP Grant Shapps told the WHT: “Essentially I agree that house prices are far too high for the vast majority of people.
“The point I’d make is that this didn’t happen overnight and in fact, although the NHF talk about this taking place over the past decade, in the past three years prices have been stable, having fallen a bit from their peak.
“Nonetheless, they’re still too high.
“So I have a lot of different schemes to help get people onto the housing ladder.
“The NewBuy Guarantee means that purchasers of a new home need only get a five per cent deposit together.
“So whereas a deposit might have previously been, say £40,000, it might now only need to be £10,000.”
He added: “We’ve got up to £20bn going into creating more new affordable housing too.
“This will mean that 170,000 affordable homes will be built by 2015 – just two-and-a-half years time.”
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