Redbridge second worst in UK for ratio between wage and house prices
PUBLISHED: 07:00 01 April 2019 | UPDATED: 17:47 02 April 2019
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Prospective buyers in Redbridge have to pay 13 times their annual salary on average to buy a home, new figures show.
According to the Office of National Statistics (ONS), the borough has seen the second highest increase in the country between house prices and earnings in the last five years.
Kensington and Chelsea remained the least affordable local authority in 2018, with average house prices being 44.5 times workplace-based average annual earnings.
Neighbouring borough Newham came in at 10th place. Across England and Wales, the affordability gap between the most and least expensive places to live is at its widest since records began.
The average price of a newly-built property in 2018 was 9.6 times average annual workplace-based earnings while the average price of an existing property was 7.6 times average earnings
Each year, the ONS calculates how affordable housing is, by dividing the median house price in local authorities by the median full-time annual income.
The higher the ratio is, the less affordable homes are to buy.
The ONS uses the median which is the middle number in a series, instead of the mean average, so the figures are not distorted by extreme highs and lows.
In Redbridge last year, the affordability ratio was 12.8, well above the England and Wales average of 7.8.
The average house price was £430,000, and the average annual salary £33,613.
This vast gulf between earnings and house prices highlights the impact of the housing crisis, with buying a home out of reach for many.
The drastic increase in house prices since 2002, when the ONS first began comparing this data, is the main cause.
The average home in Redbridge then cost £159,000.
The 2018 figure is 170per cent higher.
In that time the average annual salary has only increased by £8,053 – a 32pc rise.
Nationally the proportion of households renting has doubled over the last decade, creating a so called “Generation Rent”.
Polly Neate, chief executive of the housing charity Shelter, said: “The figures leave us in no doubt that owning a home is an all-but-impossible dream for millions of working families.
“Combined with the dire lack of social homes, this has left huge numbers of people with no choice but to rent privately.
“It cannot be right that so many families, especially those on lower incomes, now face a lifetime in deeply unstable private renting, where they’ll have to pay well over the odds to keep a roof over their head.
“More families desperately need the option of social housing, and they need it now.”
Nigel Henretty, head of housing analysis at the ONS, said: “After five years of decreases, the estimated affordability of homes in England and Wales remained static in 2018.
“It’s also notable that the estimates show newly built homes remained significantly less affordable than existing properties.”