The Affordability Gap
A home used to
cost three years' pay.
In the 1990s a typical home cost around three to four times a salary. Now it is far more, and the deposit alone can take decades to save. Pick your region and see the gap, and what closes it.
See it
House price to earnings
a typical home vs a typical salary
Years to save a deposit
for a 20% deposit at your savings rate
Rent takes
of a typical income here
Understand it
House prices did not detach from wages by accident. For decades Britain has built far fewer homes than it needs, planning has made new supply slow and uncertain, and cheap credit poured into a fixed stock of housing, pushing prices up faster than pay. Right to buy sold off social housing without replacing it, so more people compete in a private market that is not growing fast enough.
These were policy choices, sustained across governments of both parties since the 1990s. The result is a gap that punishes anyone who does not already own, and rewards those who do. It is the clearest driver of the intergenerational divide, and it is fixable with the same lever that made it: how much we build, and where.
Fix it
Build to a binding target
Set a real housebuilding target and reform planning so it is actually met. Sustained supply is the only thing that pulls the price-to-earnings ratio down.
The trade-off
Asks existing owners to accept more building nearby and slower price growth on their own homes.
Build social housing again
Replace the social homes sold off and never rebuilt, so lower earners are not forced entirely into a stretched private market.
The trade-off
Significant public capital up front, repaid over decades in lower housing benefit and higher stability.
Give renters security
Longer tenancies and predictable rents so the years spent saving a deposit are not also years of insecurity.
The trade-off
Tighter rules for landlords, which must be set so they do not reduce the supply of rented homes.
Sources & method
- ONS · Housing affordability in England and Wales (2023): house price to earnings ratios by region.
- ONS · Private rental affordability (2024): rent as a share of income.
Regional ratios are representative of ONS 2023 figures. Years to save assumes a 20% deposit and the chosen share of income saved each year; the calculation is independent of the exact salary. Figures are indicative for the prototype.