The average UK house price is now more than six times the average wage, meaning prospective buyers could struggle to get mortgage approvals.
People are now facing a gap of £6,111 between the current average wage and the wage required for a general mortgage approval of four-and-a-half times salary, according to research by eMoov.co.uk.
The situation is significantly worse in the capital, where average house prices are 12.05 times the average wage.
In London, the required wage for a mortgage approval at four-and-a-half times the average salary is £94,941 – significantly greater than the average wage of £39,400.
In Burnley, Lancashire, the situation is dramatically different - the average wage of £23,500 is £7,379 more than the four-and-a-half times requirement (£16,121) the average house price of £80,605.
The research is based on the latest wage data released by the ONS and the most up to date Land Registry house price index.
Founder and chief executive of eMoov.co.uk Russell Quirk said: “The reality gap between the average wage and wage required for mortgage approval is a staggering. Of course, many of us buy with a partner or friend in order to get on the ladder, but even when sharing this burden there is still a considerable financial mountain to climb.
“It also shows that elsewhere around the nation there is almost a direct correlation between what a property goes for and the earnings on offer.
“But regardless of where you live and what you earn, there has been a serious unbalance between the escalating price of property and the stagnating wages available to UK buyers. This really needs to be addressed to help current and future UK buyers get a foot on the ladder and continue climbing it.”
Greg Heath, managing director at Lancashire-based Derbyshire Booth, said: “I have got clients in the London area and they can’t get on the housing ladder, but my three kids, who are in their 20s, are on the ladder.
“The wages are not as good as the city centres round here, but on balance with affordability it is about quality of life.”
He added that the South Ribble area, where he is based, was recently rated one of the best places to live in the country, and housing affordability was one of the main reasons for that.
simon.allin@ft.com
