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Consider that research by the ONS and Nationwide shows house prices to be still above the long-run average in relation to earnings.
The NHF spells out what this means. The gross household income needed to get a typical mortgage (90 per cent of house value,Christian Louboutin Platform Pumps, 3.5 times income) for the average home in England is £55,http://jimi-webdesign.com/members/home,670 – more than twice the average income of £20,946. Lower value homes are out of reach too. The average price of a house in the bottom 25 per cent of values is £123,000.  The gross income needed for a typical mortgage on such a home is £31,629.
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There’s nothing like a few facts to illuminate a problem.
The figures for London are even more astonishing. The average house price in the capital is £363,043. To get a typical mortgage for such a property,  a household would need a gross income of £93,http://www.piercings.net/tattoo-flas...e.php?pos=-143,353. Average London incomes are £26,353. The average price of a house in the lower quartile of homes is £195,167. The gross household income needed to get a mortgage for such a home would be £50,186.
All this leads me to the conclusion that, constriction of supply and the specific pressures of the London property market notwithstanding, house prices are destined to fall further.
So the average first-time buyer who wants to buy a modest home in England (and who cannot access any financial help from relatives) needs to have an annual salary of around £31,Christian Louboutin Pumps,000 (or to earn that sum combined with a spouse). To buy a house in London, they would need £50,000 a year.
The National Housing Federation has published a study that finds the average house price in England in 2009 is 10.3 times the average income.
Now consider, as my colleague Sean O’Grady has pointed out,Christian Louboutin Pumps sale,http://soph.jp/MT/archives/2010/11/2...1.php#comments, that the whole market is sustained by a steady flow of first-time buyers.  If a home owner wants to move up the property ladder, they generally need someone lower down,http://draytonmanorplus.co.uk/galler...ge.php?pos=-99, or a new entrant, to buy their home. In the past, cheap credit has enabled these first-time buyers to bridge the gap between their incomes and house prices. But according to the Bank of England,Cheap Christian Louboutin Sandals, the banks have begun restricting access to credit for housing. Interest rates have been slashed, but first-time buyers are still priced out. It’s not so much a problem of the price of credit, but rather the availability of it.
House prices reflect a shortage of supply, as the NHF is keen to stress. But they also reflect ease of credit. And they also reflect a surge of property speculation, particularly visible in the buy-to-let market.
The average London salary is higher,Cheap Christian Louboutin Evening, but that doesn’t make housing in the capital any more affordable. In another study, the NHF finds that average house prices in London are 13.5 times the average London income.