Ground down by homes

11 February 2008 By Ian Campbell

UK homeowners have often seen house price inflation as a boon. But Britons pay too much, borrow too much and work too hard to afford their small, overpriced homes. And high prices also exclude many from homeownership.

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The 2008 International Housing Affordability Survey by Demographia rated housing affordability in the UK, Ireland, Canada, the US, Australia and New Zealand. It found affordability was at its worst in Australia and New Zealand, closely followed by the UK. Housing was most affordable in Canada and average affordability in the US was also comparatively good.

According to a house ownership accessibility index developed by the Royal Institute of Chartered Surveyors, the cost of becoming a home purchaser in Great Britain has worsened by 351% since the most accessible point in 1996. A firsttime buyer couple, both on lower quartile earnings (totalling £26,595 after taxes), will now have to save up to the equivalent of 104% of joint takehome pay, to build up the £27,729 needed for up front buying costs on a typical home, according to Rics.

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