Brexit: George Osborne discusses impact on UK economy
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
House prices are among a long list of consumer goods that have sky-rocketed in recent months. New data has charted the rise of these prices in 50 cities around the UK, with millions of Britons potentially sitting on a goldmine. Inflation rates have increased — the key factor behind the rise in the cost of living across the board. While housing is considered a consumer good, the right to it is a central aspect of the Universal Declaration of Human Rights and International Covenant on Economic, Social and Cultural Rights.
However, figures from the housing charity Shelter show that 17.5 million people in the UK do not have access to safe housing which they can afford to live in.
Because of inflation the average price of a property is now around four times as much as it was 20 years ago.
Data from the Office of National Statistics (ONS) — compiled by Plumbnation — shows just how much these house prices have risen, charting the increase from 2002 to 2022.
The cities in the data include: Bath, Birmingham, Blackpool, Bournemouth, Bradford, Brighton and Hove, Bristol, Burnley, Cambridge, Cardiff, Carlisle, Chester, Cornwall, Coventry, Derby, Doncaster, Durham, Exeter, Ipswich, Kingston upon Hull, Leeds, Leicester, Lincoln, Liverpool, London, Luton, Manchester, Middleborough, Newcastle, Newport, Norwich, Nottingham, Oxford, Peterborough, Plymouth, Portsmouth, Preston, Reading, Salford, Sheffield, Stoke-on-Trent, Southampton, Sunderland, Swansea, Wakefield, Wigan, Wolverhampton, Worcester, York.
While southern England is notorious for its high house prices, it is two cities in the north that come in with the largest increases.
Manchester takes the number one spot where a total price increase of £161,802 has occurred — this equating to around six times the amount of the median average UK salary in 2022.
Turn back the clock 20 years and buying a property here cost just £48,845 but today that cost is now £210,647 — a 331.26 percent difference.
The city of Salford, next door to Manchester, takes the second spot, prices having increased by 289.68 percent, from £50,567 in 2002 to £197,047 today.
Travelling south, to Leicester in the East Midlands, property prices have increased by a whopping £158,826, from £61,232 in 2002 to £220,058 in 2022.
About half-way through the list, surprisingly, is the capital, London.
Generally considered one of the most expensive cities in the UK, the ONS data found that the average property price today is £510,102, compared to £169,841 in 2002, a growth far slower than that seen in some of its northern neighbours, an increase of 200 percent.
Among the lowest increases on the list included Reading (134.73 percent), Worcester (147.67 percent), and Blackpool (147.67 percent).
The report read: “The average UK house price was £278,000 in March 2022, which is £24,000 higher than this time last year.”
Many continue to rent as house prices continue to increase.
VeriSmart, a letting compliance firm, said: “Homeowners presently make up 65 percent of the housing market, which is a fall of five percent since 2010.”
VeriSmart forecasts that by 2045 renters will account for 55 percent of the housing market. With the high cost of property leaving many in the UK to remain in the rental market.
The cost of living crisis and rising inflation saw interest rates from the Bank of England increase by 0.25 percent to 1.25 percent this year.
Experts suggest that such a financial environment will very soon curb the increase in house prices.
The Times Money Mentor said: “The cost of living crisis is likely to be the biggest cause of a slowdown in the housing market.
“As household budgets come under pressure, fewer people can afford to stretch themselves to buy homes.”
As a result, first time buyers are likely to hold off in the hope that prices plunge.
As a way to try to get first time buyers on the property ladder the Government has introduced schemes such as Share to Buy and Help to Buy.
The Share to Buy schemes are designed so that the purchaser can pay mortgages on the share that they own, with the remaining share paid to a housing association.
This contrasts to the Help to Buy scheme where first time buyers are able to purchase a property with just a five percent deposit.
Buyers are then allowed to borrow 20 percent of the purchase price which remains interest free for up to five years.
Although thousands of people have been helped by these schemes, they have not been without criticism.
The finance website, This is Money, said: “Long-term policies such as Help to Buy and Shared Ownership have been slammed for inflating prices and lining developers’ pockets.”
And the squeeze of the cost of living crisis is still making it increasingly difficult for people to get onto the property ladder even with the schemes.
Rishi Sunak promises to invest in British businesses [INSIGHT]
Russian debt default: Last time it happened and what happens next [ANALYSIS]
House prices: Contracting market could lead to ‘sharp correction’ [UPDATE]
According to the Resolution Foundation, in order for a first time buyer to save five percent of their income for a deposit it would take them 21 years.
By contrast, saving that much for a deposit in the early Nineties would have taken just four years.
A recent report by the housing charity Shelter found that more people are closer to becoming homeless than becoming homeowners.
Between October and December last year close to 34,000 households in England became homeless with 8,000 of them being families with children.
In a recent speech, Boris Johnson announced another new scheme aimed at tackling the housing crisis.
Dubbed “benefits to bricks”, the new initiative will use a £30 billion Housing Support Budget to get more people into the property market.
Explaining it , Mr Johnson said: “We are going to look to change the rules on welfare so that the 1.5 million working people who are in receipt of housing benefits – I stress working people – and who want to buy their first home will be given a new choice: to spend their benefit on rent, as now, or put it towards a first-ever mortgage.”
Source: Read Full Article