BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in: UK: Wales
Front Page 
World 
UK 
England 
Northern Ireland 
Scotland 
Wales 
UK Politics 
Business 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Monday, 3 December, 2001, 08:08 GMT
House prices outpacing incomes
House sales signs across the UK
Rising house prices have outstripped average earnings across many parts of Wales, meaning many people are unable to afford to buy their first home.

Research by the Labour Research magazine found that the problem of the booming housing market, which has affected workers in the south East and London, has spread to Wales.

A survey of the 22 council districts in Wales revealed that workers on average earnings in 13 districts were struggling to find a foothold on the housing ladder.

In the worst affected areas, single people do not have the level of income to match house prices.


The 6-9% rise in house prices in Wales is sustainable

John Mitchell, chief executive Principality Building Society
These areas include Newport, Bridgend, Powys and Pembrokeshire, while in Monmouth even a couple on average wages will struggle to buy a house.

The home-buying survey analysed whether local house prices were more or less than three times the average working wage of a single person.

Areas where average prices are less than three times the average wage include Blaenau Gwent, Neath Port Talbot and Torfaen.

The research looked at workers in a range of essential occupations including nursery nurses, local government workers, teachers and other frontline public services.

'Catch up'

Figures showed that in some areas, even the joint earnings of a couple only amount to very limited options.

John Mitchell, chief executive of the Principality Building Society, said Wales had been experiencing a "catch up" on house prices with other more affluent regions.

"House prices are controlled by economics at the end of the day; people will buy what they can afford," he said.

Mr Mitchell added that low mortgage lending rates meant that the recent phenomenon of buy-to-let mortgages - which has kept the housing market buoyant in some areas - could possibly level out.

"With mortgage rates having fallen so dramatically, it is more expensive to rent than to buy," Mr Mitchell explained.

The purchase of second homes remains a thorny issue in parts of rural Wales, where Welsh language campaigners have urged house prices to be "capped" to allow local people to buy.

Hotspots

Mr Mitchell added: "We have a sustainable market now, we do not want a boom and bust situation.

"The 6-9% rise in house prices in Wales is sustainable, but I think there will possibly be an interest rate rise in the next 12 months."

In August, Land Registry figures showed that house prices in Wales had risen by 6.5% for the year to July, compared with 11% in England.

In Wales, the average cost of a house had risen from 64,767 to 68,963, with hotspots in Cardiff and Monmouthshire.

But in Blaenau Gwent, house prices are the cheapest in England and Wales, at an average of 35,000.

In London, a detached property costs more than 400,000 to buy.

See also:

30 May 01 | Wales
House price growth lags behind
21 May 01 | Business
Fears of crash blight housing market
03 May 01 | Business
Property prices surge
30 Apr 01 | Business
Housing market steady
10 May 01 | Business
UK trims rates 0.25%
03 Apr 01 | Business
Foot-and-mouth hits house prices
21 Feb 01 | Business
Halifax stokes mortgage war
20 Feb 01 | Business
Analysis: Cheaper mortgages for all?
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Wales stories are at the foot of the page.


E-mail this story to a friend

Links to more Wales stories