Barclaycard is now offering a record 27 interest-free months to pay off your debts.
House price-salary gap widening
House prices have risen much more steeply than wages over the past 10 years
The cost of buying a home in England has rocketed by more than three times the rate of the average salary in the space of a decade, a study has found.
The National Housing Federation said that in 2001 the typical price of a house was £121,769, while the average salary was £16,557. But 10 years later the price of a home had increased to around £236,518, a 94% rise, despite the sluggish state of the housing market in recent years.
Meanwhile, wages have risen by 29% to £21,330 over the same period, making buying a home increasingly unaffordable, according to the federation, which represents housing associations.
The housing federation study found that the area of Copeland in the western Lake District region of Cumbria has seen the fastest widening of the gap between house prices and wages over the decade, with house prices increasing by 145% to reach £129,862 by 2011, while incomes rose by 5% to reach £21,117.
House prices were 2.6 times average local annual earnings in Copeland in 2001 but by 2011 they were 6.1 times the typical wage. In 2001 the ratio between the average house price and salary was 7.4 across England, but by 2011 that had risen to 11.1, the study said.
Saving up for a mortgage has also become much harder, the study found. In 2001 the deposit for a typical 90% mortgage in 2001 was £12,177, about nine months of an average salary. But with borrowers with smaller deposits struggling to take out a mortgage amid the uncertain economy, the federation argued that people are now much more likely to need a chunkier deposit. By 2011 the deposit needed for a typical 75% mortgage was £59,129, almost three years of an average salary.
David Orr, chief executive of the National Housing Federation, said: "These shocking figures show that it is getting increasingly harder for millions of people to buy a home of their own in the current climate. With the gap between income and house prices growing ever wider, people can often feel like they have to win the lottery to be able to buy in their local area. A shortage of homes means the price to buy them is being pushed ever higher by the market, and out of reach of millions of hard- working families. Unless we start building more homes people can truly afford to match the demand, this will only get worse."
Housing minister Grant Shapps said: "We are pulling out all the stops to help people across the country realise their dream of home ownership. That's why we've introduced the NewBuy Guarantee, which enables aspiring homeowners to buy with just a fraction of the deposit they would normally require, and the FirstBuy scheme, which offers a valuable alternative to the bank of mum and dad.
"But I am also determined that we get Britain building and deliver the affordable homes this country needs. We are investing £19.5 billion public and private funding into an affordable housing programme set to exceed expectations and deliver up to 170,000 homes, and putting £1.3 billion into getting workers back on to stalled housing developments and building the infrastructure needed to unlock new sites."
Shadow housing minister Jack Dromey said: "As rents hit a record high, it is clear privately renting tenants are paying the price of the Tory-led Government's failure to build enough affordable homes. The Government's housing and economic policies are making the housing crisis worse, not better. As a result, 'generation rent' are finding themselves squeezed further and further, making it even more difficult to save for a deposit to buy their own home. Rather than face the reality and change course, Grant Shapps remains in complete denial. It just goes to show how out of touch this Government is with the everyday lives of millions of renters."
related stories on msn
latest money videos
While Royal Mail showed an increase in yearly profits Marks and Spencer saw profits fall agaisnt last year's figures.
Date 17 hrs ago, Duration 1:51, Views 264
more on msn money
msn money poll
When did you last switch your current account?
Thanks for being one of the first people to vote. Results will be available soon. Check for results
- In the last six months
- In the last year
- In the last two years
- In the last three years
- In the last five years
- 75 %I have never switched current accounts