The average wage has increased steadily - it's now £27,287 - but house prices have shot up.

The real startling increase was in the 1990s, when because of reckless lending house prices grew to £181,364, seven and a half times the average wage.

Some sanity has been restored because of house price falls in 2008.

However, there has been relatively flat wage growth in the past few years and a recently buoyant housing market has seen the gap today extend again to just over six and a half times.

Yesterday, the Nationwide Building Society reported further evidence of a cooling in the property market.

As it is much harder to get a mortgage today, this table is a further sign that, once more, buyers may be stretching their incomes just a little too far and that prices may be about to tumble.


From the turn of the last century until 2000, Britain went on a debt binge, stacking up massive mortgages, loans and credit cards. It was a combination of recklessness by lenders and borrowers.

Rather than save for a flash new TV or car, everyone just stuck it on plastic - it was buy today, pay tomorrow.

While both sides have been more responsible since then (and despite the boom in payday lenders), we're still paying. And when easy credit ended, hey presto, the amount Brits saved increased.

The savings ratio (which shows the amount of personal savings to disposable income) rose from 4.6 in 2008 to 10.4 in 2010. But it's started to fall back again and now stands at 6.7.

Laith Khalaf, senior analyst for brokers Hargreaves Lansdown, says: 'Things have not got any worse since 2007 - but they haven't got any better. People need to start spending less and saving more if we are ever going to get on top of this.'