From the TUC

Pay and house prices

18 Nov 2015, by in Labour market

New figures show that house prices have been going up more than twice as fast as earnings since the recession.

The Annual Survey of Hours and Earnings came out today. ASHE is the most important source of information about earnings and hours worked and we’re always interested in what it shows about the gender pay gap – at the current rate of progress it’ll take half a century to reach the goal of equal pay.

What I noticed today was the way the Survey underlines just how slowly pay has been going up in recent years. In April 2008, the median full-time worker earned £25,165 and by April of this year that had risen to £27,645. That’s an increase of 9.9 per cent or about 1.4 per cent a year.

As it happens, I didn’t get a chance to read the House Price Index statistics when they were published yesterday and so I read them today alongside the ASHE figures. They made an interesting contrast: in the same period the average house price (adjusted to take account of the different mix of houses sold in each year) rose from £218,000 to £272,000 – an increase of 24.5 per cent, 3.5 per cent a year.

ASHE

Another way of looking at it is to say that, between 2008 and 2015, the average house went from costing 8.7 times median full-time earnings to 9.8 times. And, according to property business HomeLet’s October Rental Index, over the past year the average UK rent for tenancies rose 9.7%, while average tenant incomes were 1.7% higher.

Renting or paying a mortgage, earnings simply aren’t keeping up with the cost of housing.

One Response to Pay and house prices

  1. Too many workers haven’t had a pay rise
    Nov 19th 2015, 6:29 pm

    […] evidence has emerged about pay stagnation in the UK. Yesterday I noted that the Annual Survey of Hours and Earnings showed that house prices had been going up twice as […]