Locked out of the property market

Property prices have jumped almost 15% in the past 12 months, further widening the gap with average earnings. How do those locked out of the housing market cope?

Plenty of people earning under £30,000 who want to get a foot on the property ladder would be advised to restrict their ambitions to the Monopoly board.

New figures from the Land Registry show the average price of a house in England and Wales has leapt to £103,000, up 14.5% in 12 months.

The only way many of us will get on the property ladder

It only takes a quick sum - mortgage = salary x three - to realise how much you need to earn to claim the title "first-time buyer".

But for many average earners, that simple calculation is a depressing thought.

Statistics show the property boom of the late 1990s bears little relation to earnings increases over the same period.

The average price of a property has shot up by 51% since 1995, when a regular home cost £68,000.

In contrast, average earnings have risen by just under 23% over the same period, according to the Office of National Statistics.

House prices 1995 & 2000

Average property price for 1995: £67,999

Av property price for 2000: £103,660

Av earnings April 1995: £17,487

Av earnings April 2000 £21,845 (estd)

Source: HM Land Registry & ONS

The growing disparity between house prices and earnings is locking many people out of the homes market. Workers in London are worst off, even though salaries are higher. The average price of a home in the capital stands at £177,000.

The UK Government is planning to ease the burden with its Starter Home Initiative for "key workers" such as nurses, teachers and police officers.

BBC News Online spoke to three London-based workers snared in the "property trap", to find how they cope.

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Name: Aidan Strain
Occupation: Nurse (ward manager)
Age: 33
Salary: £26,000

"I enjoy nursing but it's a lifetime of London poverty," says Aidan, a steward with the Royal College of Nursing and nurse at St Mary's in Paddington.

Nurses are among "key workers" identified by the government

Having begun his nursing career at 20, Aidan divided the following 13 years of his life between living in shared houses and nursing accommodation.

"I was living with six or seven other people. It could be noisy and everyone is working shifts so it can be hard to get to sleep. I was living like a student, but in my early 30s," he says.

He now has a small one-bedroom flat in the capital, which he bought through a shared ownership scheme with a housing association. Under the scheme, he owns and pays a mortgage on 75% of the flat.

Outskirts are the limit

"I think it's a very, very good scheme, but there's great competition and there are rules. You can't let it out to anyone else."

Aidan says he could have stretched to buying a small flat in outlying parts of London, but he then could not rely on public transport to fit around his anti-social working hours.

"I'm just worried about the future. What would I do if I had children and I wanted a better place to live? A house is way out of my reach."

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Name: Karron Miller
Occupation: Secretary
Age: 31
Salary: £15,500

Being in your early 30s but not having anywhere you can call home is "psychologically unsettling," says Karron, who moved to London over a year ago to live with her boyfriend. They have since split up.

Computer science is a well-paid alternative

"I just think it's never going to happen; I'm never going to be able to afford somewhere of my own."

Her plan is to apply for a one-year course in computer science that would turn her arts degree into an MSc. As careers go, computing is not her first choice, but it's "a growth industry and I'm guaranteed to get a higher paid job".

At the moment, Karron rents a room from a friend. But she could be asked to give up her place at any time, she says.

"Even if I had the money [to buy] I would think it's a rip-off. Hundreds of thousands of pounds for bricks and mortar. You'd still be earning all this money just to pay off your mortgage."

Her options for the future are either to try and buy with a partner, move outside London or go abroad.

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Name: Callum Jacobs
Occupation: Secondary school teacher (head of department)
Age: 30
Salary: £25,000

A teacher for six years, Callum has seen many of his contemporaries quit for better-paid careers. One left for a job in new media and was earning more than him within six months.

The mortgage equation is simple, but the answer can be depressing

Being locked out of the property market is not the only reason for leaving, he says, but it's up there as one of the main ones.

"I feel that I get paid a decent wage and compared to some others I'm well off. But at the same time, I have friends in the private sector who earn much more than me."

Callum, who teaches in Mill Hill, north London, says the property trap "rankles with him".

"The only way you can afford to buy in London as a teacher is if you have a separate income, rich parents or you're in a couple."

Callum says he doesn't let it gnaw away at him. "On a day-to-day basis, it's just another problem that makes a difficult job harder than it needs to be."