UK Markets close in 1 hr 8 mins

House Prices 'Soared At Treble Rate Of Wages'

(c) Sky News 2012

House prices in the UK have soared by more than three times the amount of the average salary increase over the past decade.

According to a study by the National Housing Federation, the standard cost of a house in 2001 was £121,769.

During the past 10 years, that figure has risen by 94% to around £236,518, while the average salary for the same period has gone up from £16,557 to £21,330 - an increase of 29%.

The federation which represents housing associations has said the difference means buying a home is becoming increasingly unaffordable.

The findings come on the same day a separate study said renting reached a new high of £725 a month in England and Wales in July.

Lettings group LSL Property Services said the increase in average rent prices was due to "fierce competition" as frustrated house hunters struggle to buy.

The National Housing Federation found that Copeland in Cumbria's Lake District saw the fastest growing gap between house prices and wages.

While house prices in the region rocketed by 145% to £129,862 by 2011, average incomes rose by 5% to £21,117.

The study also found saving for a mortgage has become much harder as bigger deposits are required.

In 2001, the deposit for a typical 90% mortgage was £12,177, which was about nine months of the average salary.

Ten years later, a 75% mortgage needed a deposit of £59,129, almost three years of an average income, according to the data.

David Orr, chief executive of the National Housing Federation, said: "These shocking figures show that it is getting increasingly harder for millions of people to buy a home of their own in the current climate.

"With the gap between income and house prices growing ever wider, people can often feel like they have to win the lottery to be able to buy in their local area."

He added: "A shortage of homes means the price to buy them is being pushed ever higher by the market, and out of reach of millions of hard- working families.

"Unless we start building more homes people can truly afford to match the demand, this will only get worse."

The findings come despite a sluggish housing market in recent years.

More From Sky News