First time buyers see wages fall well behind prices

06-Sep-2007

House prices have risen by 180 per cent over the past decade despite wages rising by just 43 per cent, the Trades Union Congress (TUC) has said, highlighting the problem faced by today's first time buyers.

The average price of a home has risen from £60,000 in 1997 to £168,000 this year, while the average wage rose from £17,000 to £24,000 over the same period.

With prices rising four times faster than income, a typical worker would need to save seven years' worth of salary in order to buy their home outright, the TUC study added.

"It is striking that house prices seem to have gone up in line with the pay of top directors and the super-rich, rather than middle and low earners," said TUC secretary Brendan Barber.

'The government is right to have put a new emphasis on housing, though it's a shame that this didn't start earlier. We desperately need more quality affordable homes to rent and to buy," Mr Barber added.

Earlier this week research from Abbey found that first time buyer demand was stronger in the south of the country than the north despite higher house prices.

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