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House prices in Hertfordshire rise five times as much as incomes in decade
9:10am Saturday 18th August 2012 in News
The cost of buying your own home in Hertfordshire increased by more than five times the rate of an average salary over the past ten years – with Watford the second hardest-hit area nationwide.
National Housing Federation research found that in 2001, the average price of a Hertfordshire home was £173,202 and the average salary was £18,470.
In the space of ten years the price of a home has rocketed to £312,786 – an increase of 81 per cent - whereas wages have risen just 16 per cent to £21,403, making buying a home increasingly unaffordable for thousands of workers.
Watford saw the biggest drop in affordability across the whole of the East of England and the second biggest drop nationwide. House prices here rose 76 per cent in ten years, while incomes actually fell by 13 per cent.
Nationally, the average house price rose by three times the rate of average income.
Saving for a mortgage has also got much harder, with the size of deposit needed to get a mortgage rising by 351 per cent in Hertfordshire and 341 per cent in Watford.
In 2001, the deposit for a typical 90 per cent mortgage (available in 2001) in Hertfordshire was £17,320, just under one year’s salary.
By 2011 the amount banks were willing to lend was less, and so the deposit needed for a typical 75 per cent mortgage leapt to £78,196, almost four years’ salary.
Kate Dodsworth, Assistant Director for London, South East and East of England at the National Housing Federation, said: “These shocking figures show that it is getting increasingly difficult for thousands of people in Hertfordshire to buy a home of their own in the current climate.
“With the gap between income and house prices growing ever wider, people can feel like they have to win the lottery just to own a home in their local area.
“A shortage of homes means the price to buy them is being pushed ever higher by the market, and out of reach of millions of hard working families.
"Unless we start building more homes people can truly afford to match the demand, this will only get worse.”
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