Property prices in the UK have generally been increasing year-on-year since 1998, with the majority of people having to wait longer to buy their first home, if at all.
The latest data on housing prices by the ONS has today been released as affordability of homes plummets amid the cost of living crisis.
But what are the average house prices in the UK? How have they changed over the last two decades? And could we see the housing market slow down in the current climate, as property website Rightmove suggests costs could soon fall.
What is average house price in UK?
In England, the average house price is £275,000, while the median income is £31,800. This cost is equivalent to a ratio of 8.7 years of income.
In Wales, the average house price is £176,000, while the median income is £29,400. This cost is equivalent to a ratio of six years of income.
In Scotland, the average house price is £166,000, while the median income is £30,300. This cost is equivalent to a ratio of 5.5 years of income.
How have house prices changed since 2000?
According to the Land Registry, In 2000, house prices averaged at around £90,000 across the UK.
According to the ONS, the median annual salary was £18,848.
If house prices in England averaged the same as the data available for the whole of the UK, by 2022, England's average house prices have increased by 3x while salaries have increased by just 1.5x.
Other key takeaways from ONS statement on house prices
The ONS' latest report announced: "While purchase affordability ratios for the average home are below their peaks in Wales (2007) and Scotland (2008), affordability ratios in England are worse than at any point since the series began in 1999."
Another point confirmed in regards to home affordability, that particularly focuses on low-income households in England:
"Across English regions, an average-priced home in the North East cost the equivalent of almost 12 years of income for a low-income household, compared with 40 years in London."
England is the worst off when it comes to home affordability in the UK.
Since 2014, England's home affordability ratios have increased and are now beyond the peak of the 2008 recession.
It faces the most increased affordability gap, compared with Scotland and Wales.
Will house prices come down?
Property website Rightmove has confirmed that house prices have hit a sixth record high this year.
However, it believes the pace of growth is due to slow down in the second half of 2022, as the cost of living crisis takes its toll on household finances.
As interest rates are expected to rise, along with a further energy bills increase set for October, demand for property is likely to fall.
Tim Bannister, Rightmove’s director of property science, said: “The challenges presented by rising interest rates and the cost of living will no doubt have an effect throughout the second half of the year, as some people reconsider what they can afford.
