Income to Property Price Ratio Increases to Over 8x

As property prices have surged during the pandemic, the income to property price ratio has increased to over 8x.

Prices have increased due to the Stamp Duty Holiday launched in July 2020, changing requirements for housing with buyers looking for larger and more flexible homes and properties with access to green space.

The average income in the UK is £31,770 and the average house price in the UK is now £257,726, with a house price to income ratio of 8.1x, meaning it would take 8.1 years to purchase the average property outright. In July 2020, the average property price was £239,355, approximately 7.5x the average income.

The South East of England has experienced the highest ratio increase of 0.7x from 9.3x income, with the average property costing 10x the average income.

It is now increasingly difficult for home buyers to climb the property ladder as all regions of the UK have seen an increase in the income to property price ratio since the inception of the Stamp Duty Holiday.

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Buying More Expensive than Renting

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For the past five years, buying a property has been cheaper than renting. A home buyer with a 10% deposit in March 2020 would have saved £102 per month by buying a property compared to renting.

The average first time buyer will now find renting cheaper than buying, which is despite a 7.1% increase in rent over the past 12-months according to research by Hamptons. It was 7% (£71 per month) more expensive for a first time buyer with a 10% deposit to purchase a property, compared to renting in May 2021. The average monthly mortgage repayment is £1,125 compared to rent at £1,054 per month.

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Below Market Value UK Property

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Regency Invest specialise in securing below market value property for our buy-to-let investors, with a whole range of incentives to reduce the cost of purchasing an investment property at a time when prices are increasing.

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Click here for further details on our available below market value properties.