New research has revealed average UK house prices have increased 5.1 times faster than average weekly earnings over the past five years.

Analysis by the Resolution Foundation shows house prices have risen 36% since April 2011.

However, average weekly earnings have increased just 7% over the same period.

In London and the South East, house prices are up 57% and 39% respectively, while weekly earnings have risen 5% across the South East and declined slightly in London.

In Scotland, the average house prices have risen 14% from £170,000 to £193,000, while average weekly wages have increased 6% from £417 to £445.


The Foundation added post-millennial house price rises have led to a dramatic shift in housing tenure, with home-ownership rates falling from around 70% to 55% over the last decade for those on low to middle incomes.

The proportion of people renting privately has doubled over the same period to 27%.

Lindsay Judge, Senior Policy Analyst at the Resolution Foundation, said: "Runaway house prices have had a clear feed through to living standards in recent years. Most obviously it has priced people out of home-ownership, pushing significant numbers into the private rental market.

"But rampant house prices inflation isn't just a problem for wannabe home-owners. It has increased the stock of mortgage debt, and fuelled demand for renting that is driving up costs there too. Ultimately we all pay for house price inflation by spending a greater share of our incomes on housing."

Ms Judge added the solution to the housing crisis "isn't easy – especially in London".

"It will require radical action to both boost the supply of housing for all tenure types, and improve conditions and security in the UK's private rental sector," she said.

(LM)