The gap has grown in the years since older generations stepped on the housing ladder, according to Shelter.
The report by the charity found that first-time buyers would be paying £77,000 less to get on the property ladder if house price inflation had kept pace with wage increases in recent decades.
Titled Housing Affordability for First Time Buyers, it found that if house prices had risen in line with earnings between 1969 and 2013, the average cost of a home in England would have grown to £121,166 when in fact it is £198,039.
House price growth was closest to income growth in the North East, where house prices increased by 34 times over the 44-year period in question, while income increased by 24 times. However, at £113,606, average prices were still £34,178 higher than if they had tracked wage growth.
The biggest discrepancy was in London where, even before last year’s price leaps, Shelter found prices were £139,203 higher than if they had risen in line with wages, at £333,057.
The charity’s chief executive Campbell Robb said: “When wages and house prices are so out of sync that first time buyers are having to pay tens of thousands of pounds more for a foot on the ladder, it’s a clear sign that our housing market is out of control. Without access to a lump sum from the bank of mum and dad, millions of young people and families are facing a lifetime in expensive private renting, or stuck in their childhood bedrooms well into adulthood.”
Politicians of all parties need to stop announcing piecemeal schemes and commit to ending the housing shortage once and for all. We need a big bold plan that will fix our broken house-building market for the long-term.”
