Midland house price rises mean homeowners 'need to double salary'

People on average wages in parts of the West Midlands would need to more than double their annual salary just to keep up with out of control house prices, new research shows.

Spiralling house prices and a slowdown in the number of home being built in recent years mean that in parts of the region people would need to take home an extra £24,000 a year to be as well off as they were in 1997.

Across the region wages have failed to keep pace with the housing market, pushing property out of reach of a growing number of people, according to the housing charity Shelter.

Shelter analysed house prices and earnings across England for the period between 1997 and 2012 and found in the West Mildands the average salary would have to have increased by between £14,000 and £24,000 to keep pace.

Campbell Robb, Shelter’s chief executive, said:  “When you’d need to more than double your salary just to keep up with rising house prices, it is no surprise that the dream of a home of their own is slipping further out of reach for a generation.

“Politicians need to start meeting people halfway by committing to bold solutions that will get more affordable homes built. Otherwise future generations will find themselves priced out of a stable home, however hard they work or save.

“The reality is that successive governments have failed to build the affordable homes that this country needs, and as a result our housing shortage has reached crisis point.

“Despite the fanfare surrounding Help to Buy, pumping money into mortgage guarantee schemes is not the solution. This further inflates prices by increasing demand for an already limited number of homes, and will only make things worse for the next generation of first time buyers. The only solution is to build more affordable homes.”

In Stratford-upon-Avon, the average annual salary would need to increase by over £24,000 to be in line with the rise in house prices, according to Shelter.

In Worcester people on average wages would need an extra £22,000 each year to keep up with house price inflation, while in Birmingham more than £20,000 would be needed.

Averages earners in Walsall would need the smallest pay rise, but here close £14,000 would still need to be added onto the average salary to put it in line with the rise in house prices.

The impact of the housing shortage has been widespread, with the latest Census showing a six per cent drop in the proportion of home owners in the West Midlands.