First time buyer average house price to earnings ratio
Divide the average house price by the average earnings and you get the ‘Average House Price/Earnings ratio’.
This is a key indicator of how much people are stretching themselves to get on the housing ladder.
The long term average has been around 3.5, but as you can see there have been peaks and troughs which have all coincided with housing booms and busts. No coincidence in that, it’s all part of the bubble DNA!
Source: Nationwide (House Price Benchmarks > First Time Buyer House Price Earnings Ratio)
Last updated: 02/04/2015