Residential property prices in England and Wales now cost 7.6 times the average income, up from 3.6 times earnings in 1997, which is bad news for aspiring homeowners struggling to get a foot on the housing ladder. 

According to fresh data from the Office of National Statistics (ONS), home prices in England and Wales have increased by 259% since 1997, while annual earnings rose by 68% over the same time period.

Unsurprisingly, housing affordability is most stretched in London boroughs, with Kensington and Chelsea the least affordable area, with property prices 38.5 times greater than annual earnings.

The most affordable local authority in 2016 was Copeland, with home prices being on average 2.8 times greater than annual earnings.

Andy Sommerville, director at Search Acumen, said: “Evidently, the 21st century has seen home-ownership pushed far into the distance for many young professionals but we are now in danger of ‘Generation Rent’ encompassing house hunters of all ages.

“The huge gap between earnings and affordability is extremely worrying. Prospective buyers are more stretched to buy property in every single local authority than they were before the turn of the millennium.” 

Sommerville said that the growing gap is not simply the fault of wages, but down to the widening supply-demand imbalance in the housing market.

He added: “Various policy announcements over the past months have given some reassurance that this is on the government’s agenda, however Philip Hammond’s radio silence when it came to housing in the latest Budget led to some criticism from the industry.

“It is now up to the construction industry and the mortgage lenders to kick-start the recovery of our problematic sector and pave the way for a healthier and sustainable housing market.”

Roger Harding, Shelter’s director of communications, policy and campaigns, described the figures an “another nail in the coffin” for the existing housebuilding system, “which has failed an entire generation”.

“In the last two decades, house prices have been growing nearly four times faster than average wages, because our broken system of building homes benefits land traders and developers rather than families. A major reason for this is the eye-watering cost of land, which means developers build fewer affordable homes in order to make their money back,” he said.