House prices still unaffordable for the average earner despite wage rises – Nationwide
Average house prices are still unaffordable for the typical earner, the UK’s largest building society has said.
Despite wages rising above the rate of inflation in recent months and house prices falling from the record high of summer 2022, “housing affordability is still stretched”, Nationwide said.
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A greater proportion of take-home pay is going on mortgage bills, according to the lender’s house price index.
Someone earning the average UK income seeking to buy their first home with a deposit worth 20% of the asking price will have a monthly mortgage bill of 37% of their end pay packet.
It’s above the long-standing average of 30%.
The mortgages affect
While people have been typically earning more and house prices are 3% lower than the all-time high two years ago, rising mortgage costs have made unaffordability worse.
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Lloyds Banking Group chief executive Charlie Nunn said the era of ultra low interest rates is over.
With high interest rates – raised to 5.25% by the Bank of England to bring down inflation – have come more expensive mortgage costs.
According to Nationwide, the interest rate on a five-year fixed-rate deal for a borrower with a 25% deposit was 1.3% in late 2021. That has soared and is now around 4.7%.
Latest official figures showed basic pay grew 6% in the three months to April, while inflation – the rate of price rises – was 2.3% in the same month. But data from living-standards thinktank the Resolution Foundation said weekly wages have increased by just £16 in 14 years when inflation is factored in.
Compounding affordability problems is the fact UK house prices are back on the rise and were 1.5% more last month compared to June 2023.
Fewer mortgages, more cash
There have been fewer house-buying transactions over the past year, Nationwide added.
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The total number of transactions is down by roughly 15% compared to the pre-pandemic year of 2019.
Higher borrowing costs have meant transactions involving a mortgage are down even more, nearly 25%.
Cash transactions, however, are up 5% on pre-pandemic levels.
Figures released by the Bank of England on Monday morning showed mortgage approvals continued to fall.
House sales are likely to fall as the number of mortgages approved dropped to 60,000 in May from 60,800 in April.
Would-be buyers borrowed half the amount of money to purchase a home, the Bank said, £1.2bn was loaned in May, down from £2.2bn in April.
The same data showed that personal lending, such as credit card debt and personal loans, grew. It suggests increased consumer demand.
The region with the fastest house price growth was Northern Ireland at 4.1% across the three months of April to June, while it became 1.8% cheaper to buy a house in East Anglia over the year, according to Nationwide figures.
A teenage girl who was killed after getting out of a police car on the M5 in Somerset has been named.
Tamzin Hall, 17 and from Wellington, was hit by a vehicle that was travelling southbound between junction 24 for Bridgwater and junction 25 for Taunton shortly after 11pm on Monday.
She had exited a police vehicle that had stopped on the northbound side of the motorway while transporting her.
A mandatory referral was made to the Independent Office for Police Conduct, which is now carrying out its own investigation into what happened.
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Avon and Somerset Police said: “Our thoughts and sympathies go out to Tamzin’s family for their devastating loss.
“A specially-trained family liaison officer remains in contact with them to keep them updated and to provide support.
“The family have asked for privacy at this difficult time.”
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The police watchdog, the IOPC, has been asked to investigate.
In a statement, director David Ford, said: “This was a truly tragic incident and my thoughts are with Tamzin’s family and friends and everyone affected by the events of that evening.
“We are contacting her family to express our sympathies, explain our role, and set out how our investigation will progress. We will keep them fully updated as our investigation continues.”
Paramedics attended the motorway within minutes of the girl being hit but she was pronounced dead at the scene.
The motorway was closed in both directions while investigations took place. It was fully reopened shortly after 11am on Tuesday, Nationals Highways said.
A survivors group advocating for women allegedly assaulted by Mohamed al Fayed has said it is “grateful another abuser has been unmasked”, after allegations his brother Salah also participated in the abuse.
Justice for Harrods Survivors says it has “credible evidence” suggesting the sexual abuse allegedly perpetrated at Harrods and the billionaire’s properties “was not limited to Mr al Fayed himself”.
The group’s statement comes after three women told BBC News they were sexually assaulted by al Fayed’s brother, Salah.
One woman said she was raped by Mohamed al Fayed while working at Harrods.
Helen, who has waived her right to anonymity, said she then took a job working for his brother as an escape. She alleges she was drugged and sexually assaulted while working at Salah’s home on Park Lane, London.
Two other women have told the BBC they were taken to Monaco and the South of France, where Salah sexually abused them.
Mohamed al Fayed. Pic: AP
The Justice for Harrod Survivors representatives said: “We are proud to support the survivors of Salah Fayed’s abuse and are committed to achieving justice for them, no matter what it takes.”
The group added it “looks forward to the others on whom we have credible evidence – whether abusers themselves or enablers facilitating that abuse – being exposed in due course”.
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Salah was one of the three Fayed brothers who co-owned Harrods.
The business, which was sold to Qatar Holdings when Mohamed al Fayed retired in 2010, has said it “supports the bravery of these women in coming forward”.
A statement issued by the famous store on Thursday evening continued: “We encourage these survivors to come forward and make their claims to the Harrods scheme, where they can apply for compensation, as well as support from a counselling perspective and through an independent survivor advocate.
“We also hope that they are looking at every appropriate avenue to them in their pursuit of justice, whether that be Harrods, the police or the Fayed family and estate.”
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Bianca Gascoigne speaks about Al Fayed abuse
The Justice for Harrods Survivors group previously said more than 400 people had contacted them regarding accusations about Mohamed al Fayed, who died last year.
One of those alleged to have been abused is Bianca Gascoigne, the daughter of former England player Paul.
Speaking to Sky News in October, Gascoigne said she was groomed and sexually assaulted by al Fayed when she worked at Harrods as a teenager.
UK
Wes Streeting ‘crossed the line’ by opposing assisted dying in public, says Labour peer Harriet Harman
Wes Streeting “crossed the line” by opposing assisted dying in public and the argument shouldn’t “come down to resources”, a Labour peer has said.
Speaking on Sky News’ Electoral Dysfunction podcast, Baroness Harriet Harman criticised the health secretary for revealing how he is going to vote on the matter when it comes before parliament later this month.
MPs are being given a free vote, meaning they can side with their conscience and not party lines, so the government is supposed to be staying neutral.
But Mr Streeting has made clear he will vote against legalising assisted dying, citing concerns end-of-life care is not good enough for people to make an informed choice, and that some could feel pressured into the decision to save the NHS money.
He has also ordered a review into the potential costs of changing the law, warning it could come at the expense of other NHS services if implemented.
Baroness Harman said Mr Streeting has “crossed the line in two ways”.
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“He should not have said how he was going to vote, because that breaches neutrality and sends a signal,” she said.
“And secondly… he’s said the problem is that it will cost money to bring in an assisted dying measure, and therefore he will have to cut other services.
“But paradoxically, he also said it would be a slippery slope because people will be forced to bring about their own death in order to save the NHS money. Well, it can’t be doing both things.
“It can’t be both costing the NHS money and saving the NHS money.”
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Review into assisted dying costs
Baroness Harman said the argument “should not come down to resources” as it is a “huge moral issue” affecting “only a tiny number of people”.
She added that people should not mistake Mr Streeting for being “a kind of proxy for Keir Starmer”.
“The government is genuinely neutral and all of those backbenchers, they can vote whichever way they want,” she added.
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Prime Minister Sir Keir Starmer has previously expressed support for assisted dying, but it is not clear how he intends to vote on the issue or if he will make his decision public ahead of time.
The cabinet has varying views on the topic, with the likes of Justice Secretary Shabana Mahmood siding with Mr Streeting in her opposition but Energy Secretary Ed Miliband being for it.
Energy Security and Net Zero Secretary Ed Miliband is said to support the bill. Pic: Reuters
Justice Secretary Shabana Mahmood has concerns. Pic: Reuters
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The Terminally Ill Adults (End of Life) Bill is being championed by Labour backbencher Kim Leadbeater, who wants to give people with six months left to live the choice to end their lives.
Under her proposals, two independent doctors must confirm a patient is eligible for assisted dying and a High Court judge must give their approval.
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Labour MP Kim Leadbeater discusses End of Life Bill
The bill will also include punishments of up to 14 years in prison for those who break the law, including coercing someone into ending their own life.
MPs will debate and vote on the legislation on 29 November, in what will be the first Commons vote on assisted dying since 2015, when the proposal was defeated.
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