The average house in England is affordable for only the richest 10 percent of households according to the Office for National Statistics, using the traditional affordability measure of five times a household’s annual disposable income.
It would take the average household eight-and-a-half years of total disposable income (£35,000 a year) to afford the average-priced home of £298,000. This is double the ratio of 1999.
The ratios are better in Wales—where the average house is considered affordable for the top 30 percent of households—and Scotland—the top 40 percent—but only in Northern Ireland is the average house considered affordable to the average household.
London, as always, is yet further removed from reality: essentially a fortress, inaccessible to almost anyone without significant family wealth. It is not even enough to be in the richest 10 percent of local households (average annual disposable income: £89,901) for the average house price in the city of £530,000 to be considered affordable. This is over 14 times the average household disposable income.
To emphasise, these are the ratios for an entire household’s entire disposable income (income after tax and benefits payments) in a year. The real meaning of these figures is that getting a mortgage on a house is an impossibility for swathes of the working class. Home ownership rates are falling, from 71 percent to 65 percent.
Sky-high house prices are matched by rents. The average yearly cost to rent in the UK is now £15,240—an increase of 27 percent since 2021. This is expected to rise by another 4 percent next year. According to the latest English Housing Survey, covering 2022-3, private renters already spend roughly a third of their income on housing costs—rising to 59 percent for the poorest fifth of the population.
In London, the average annual rent is £25,452, with the average renting household in the capital handing over 40 percent of their earnings to their landlord.
This is being paid for the oldest housing stock in Europe, with 38 percent of UK properties built before 1946. Over 3.5 million properties (15 percent of all homes) are classed as non-decent, falling below minimum standards of repair, warmth and modern facilities. More than 2 million have at least one Category One hazard and one million severe damp. For renters, average floor space has shrunk by 16 percent in the last two decades.
For those at the bottom, worries about meeting the rent or the mortgage hang over every day of their lives. Britain has by far the highest rate of homelessness in the developed world—a shocking one in every 200 households—with the number of people living in temporary accommodation more than doubling to 112,000 between 2010 and 2023.
Tenants in the UK paid a record £85.6 billion in rent in 2023, after the biggest jump on record (£8 billion) over the previous twelve months. The total is more than double the £40.3 billion paid in 2010. Mortgage owners are paying interest on outstanding residential mortgage loans worth £1.6 trillion.
