Homes in Peterborough are getting less affordable, ONS figures show

House prices continue to rise in Peterborough
House prices continue to rise in Peterborough
0
Have your say

The bad news for prospective buyers in Peterborough is that houses have got less affordable in 2017, the latest figures show.

Each year the Office for National Statistics calculates how affordable housing is in England and Wales, 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 instead of the mean as the average, which is the exact middle number in a series, so not distorted by the extreme highs and lows.

In Peterborough last year the affordability ratio was 6.95.

That means prospective buyers have to spend almost seven times their annual salary to buy a home.

That's 7.6% more than in 2016, when the ratio was 6.46.

This has been driven by house prices rising and salaries going down.

The average house price in Peterborough has increased from £160,000 to £170,000 in 2017. On top of this median yearly earnings have dropped slightly from £24,760 to £24,452.

This gulf between earnings and house prices highlights the current crisis, which has put buying a home out of reach of many.

The drastic increase in house prices since 2002, which was when the ONS first began comparing this data, reinforces this.

The average home in Peterborough then cost £76,500. The 2017 figure is 122% higher.

In that time the average annual salary has only increased by £4,772, a 24% rise.

Nationally the proportion of households renting has doubled over the last decade, creating a so called "Generation Rent". Renting families struggle for stability, not knowing whether they'll have to move at the end of the year.

Polly Neate, chief executive of housing charity Shelter, said: "Decades of failure to build enough homes has pushed house prices up so high they now wildly outstrip wages in many parts of country.

"This has put immense pressure on our dwindling supply of genuinely affordable housing especially in areas with good job opportunities where families naturally want to set down roots.

"With millions struggling to find a stable home, it's time the government offered people a long-term alternative to homeownership by building homes that are genuinely affordable to rent, including many more social homes."

Across England and Wales overall house prices have got less affordable over 2017.

The ONS report says: "On average, full-time workers could expect to pay around 7.8 times their annual workplace-based earnings on purchasing a home in England and Wales in 2017, a significant increase of 2.4% since 2016.

"Housing affordability has worsened significantly in 69 local authorities in England and Wales over the last five years, with over three-quarters of these being in London, the South East and the East."