Houses prices 'seven times salaries'

HOUSE prices in East Anglia have rocketed to nearly seven times the average salary - and mortgage repayments now account for nearly half of most people's wages.

HOUSE prices in East Anglia have rocketed to nearly seven times the average salary - and mortgage repayments now account for nearly half of most people's wages.

As the region's property prices continue to hit new heights, new research last night revealed the full extent of the pressure being placed on homeowners.

House prices are continuing to massively out-strip take-home pay, stretching many buyers to the limit, particularly those looking to take their first step on the property ladder.

Colin Girling, Suffolk's representative on the National Association of Estate Agents, said: “I know there are people who have borrowed considerably more than I would think to be safe.


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“People are finding it difficult to buy a property on their income. Some are really stretching themselves because they have still got to live, as well as pay a mortgage.

“If anything happens with their job, they could be repossessed. I certainly wouldn't recommend anyone should go to such extremes of borrowing that some people are.”

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The Home Truths 2006 survey, which compares average salaries and house prices, has been carried out by Hay Group, a management consultancy firm.

Its release coincides with Ipswich being named as one of the country's up-and-coming property hotspots.

According to yell.com, Suffolk's county town is fifth in the list of top towns and cities where property booms are expected.

The places where people would most like to move or were looking to invest were analysed, and Ipswich was found to be one of the most popular destinations in the country.

Mr Girling said many investors are looking to buy in Ipswich, although prices are not always as cheap as they have been led to believe.

He said: “Some investors seem to think they can get a semi-detached home with a garage for £125,000 but that's not the case. This type of house is very much in demand and prices are being pushed up by the buy-to-let market.”

Barry Hayes, sales manager at Boydens Estate Agent, in Crouch Street, Colchester, said prices were continuing to grow in Essex, making life extremely hard for first-time-buyers.

“Generally speaking, the prices are high in comparison with people's salaries, particularly first-time buyers,” he said.

“Having no equity behind them can make it very difficult for them. Very rarely would you find an individual first-time-buyer who could buy anything themselves. Usually it's a couple and, even then, they normally have some help from parents.”

Wil Gibson, of rural campaigners Suffolk Acre, said many people are being priced out of villages where they have grown up.

He said: “This report follows a number of others that have shown this is a real issue for Suffolk.

“Suffolk is largely a low-wage economy and we need to look at the provision of affordable homes and options around part-ownership.

“It's certainly a major problem that people in positions of responsibility need to address. This is a particular problem in rural areas.”

Average salary £25,637

Repayment as percentage of wages 46%

Average house price £174,083

Average mortgage £127,951

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