Home buyers facing wider 'affordability' gap
Homes in South Tyneside are at their least affordable for four years, according to new figures.
New figures from the Office of National Statistics (ONS) show that, last year, wages in the area increased by an average of three per cent – but house prices rose by seven per cent, to an average of £145,000.
The average annual salary in the area of £27,356 means house hunters need 5.3 times their wage to buy to a home – the highest ratio recorded since 2018. In 2020, the figure stood at 5.1.
The ONS calculates housing affordability by comparing the median house price in a local authority area to the median full-time annual income of people who live there.
The median – the middle number in a series – is used instead of the mean average to ensure the figures are not skewed by extreme highs or lows.
Polly Neate, chief executive of housing charity Shelter, said: "House prices have been pushed higher by policies that have given some people greater purchasing power, like Help to Buy or the recent stamp duty cut.
"These policies coupled with a lack of supply means homeownership is now out of reach for most people on modest incomes."
The figures show that nationally, last year saw the most severe decrease in housing affordability since 2003 — full-time workers now have to spend around 9.1 times their annual salary to buy a home, up from 7.9 in 2020.