Analysis by financial data company Moneyfacts reveals monthly mortgage repayments of an average earner now amount to almost half of their gross salary, reaching levels last seen in the 2008 financial crisis.
At the turn of the millennium, the average house price was £78,000, around five times the average wage of £15,800. Now, the average house price of £269,000 is around seven times the average wage of £37,600 and well above standard lending caps.
‘Since 2000, wages have risen 237% while house prices have increased 345%’, Moneyfacts explained.
“If wages had increased at the same rate as house prices since 2000, the average UK salary would be over £54,000 in 2025. In fact, house price inflation has far outpaced the rise in most household goods during this time. A loaf of bread would cost around £2.28 today based on house price inflation, while a dozen eggs would cost £4.73.”
Adam French, head of news at Moneyfacts, added:
“Affordability may have eased a touch over the past 12 months, but buying a home in 2025 is still too much of a financial stretch for many. Putting aside the not inconsiderable tasks of affording rapidly rising rent costs and saving a sizeable deposit, monthly mortgage repayments are eating up almost half of gross earnings – the toughest burden since the 2008 financial crisis.
“Years of ultra-low borrowing costs, Government incentives and a lack of housing supply have driven house prices far ahead of wages, leaving many buyers caught between high prices, expensive borrowing and strict lending rules. It all means that a typical borrower today will need to take a mortgage over a 50-year term to keep their repayments to a more affordable 35% of gross monthly income.
“There remains an acute risk that the market could overcorrect or overheat depending on the future path of interest rates, inflation and wage growth despite a recent softening of house price growth. We now need a period of stability where modest house price growth allows incomes to catch up so the market can return to more sustainable levels that benefit homeowners, homebuyers and the wider economy. In the meantime, it may mean holding rates where they are until inflation is in check is what is needed to nip another boom-and-bust cycle in the bud.”
Mary-Lou Press, president of NAEA Propertymark (National Association of Estate Agents), said while today’s lower interest rates may have helped many to get onto the property ladder, home buyers remain at a disadvantage.
‘Homeowners are witnessing a squeeze on their finances, and for many aspiring first-time buyers, they now need to save up what can be an unrealistic large lump sum to purchase their first home’, she commented.
“With speculation circulating regarding potential changes to stamp duty in England and Northern Ireland, we need the UK government to focus on reviewing current rates and bands rather than targeting higher-value properties, as historically, reducing or removing property taxes has led to increased transactions, which in turn stimulates spending and drives broader economic growth.
“Alongside this, all governments throughout the UK need to meet their individual housing targets to increase the supply of homes and bring down property prices in the longer term.”
| Month/Year | Average monthly earnings (gross) | Average house price | Moneyfacts Average Mortgage Rate | Average Monthly mortgage payment* | % share of gross monthly salary |
| Jun 2000 | £1,345.50 | £82,197.00 | 6.57% | £499.00 | 37.09% |
| Jun 2001 | £1,423.21 | £88,892.00 | 5.71% | £503.00 | 35.34% |
| Jun 2002 | £1,475.30 | £104,372.00 | 5.33% | £563.00 | 38.16% |
| Jun 2003 | £1,513.27 | £118,444.00 | 4.54% | £593.00 | 39.19% |
| Jun 2004 | £1,576.33 | £134,845.00 | 5.29% | £727.00 | 46.12% |
| Jun 2005 | £1,645.42 | £144,410.00 | 5.17% | £779.00 | 47.34% |
| Jun 2006 | £1,736.38 | £154,927.00 | 5.18% | £836.00 | 48.15% |
| Jun 2007 | £1,811.63 | £171,659.00 | 5.88% | £995.00 | 54.92% |
| Jun 2008 | £1,874.73 | £167,498.00 | 6.31% | £994.00 | 53.02% |
| Jun 2009 | £1,896.62 | £146,984.00 | 3.73% | £756.00 | 39.86% |
| Jun 2010 | £1,914.55 | £158,155.00 | 4.74% | £812.00 | 42.41% |
| Jun 2011 | £1,974.68 | £154,530.00 | 4.49% | £773.00 | 39.15% |
| Jun 2012 | £1,999.80 | £156,645.00 | 4.62% | £784.00 | 39.20% |
| Jun 2013 | £2,020.88 | £159,045.00 | 3.75% | £736.00 | 36.42% |
| Jun 2014 | £2,035.52 | £172,331.00 | 3.62% | £776.00 | 38.12% |
| Jun 2015 | £2,083.19 | £181,289.00 | 3.02% | £774.00 | 37.15% |
| Jun 2016 | £2,136.65 | £196,106.00 | 2.81% | £814.00 | 38.10% |
| Jun 2017 | £2,201.57 | £204,347.00 | 2.53% | £825.00 | 37.47% |
| Jun 2018 | £2,248.68 | £210,355.00 | 2.66% | £873.00 | 38.82% |
| Jun 2019 | £2,338.11 | £211,915.00 | 2.65% | £880.00 | 37.64% |
| Jun 2020 | £2,303.31 | £216,208.00 | 2.17% | £849.00 | 36.86% |
| Jun 2021 | £2,502.35 | £242,777.00 | 2.72% | £1,008.00 | 40.28% |
| Jun 2022 | £2,658.87 | £258,118.00 | 3.30% | £1,132.00 | 42.57% |
| Jun 2023 | £2,901.88 | £258,275.00 | 5.34% | £1,393.00 | 48.00% |
| Jun 2024 | £2,993.35 | £259,605.00 | 5.76% | £1,470.00 | 49.11% |
| Jun 2025 | £3,138.69 | £269,079.00 | 5.12% | £1,416.00 | 45.11% |
Sources: Moneyfacts Analyser, ONS & Land Registry
*Capital repayment mortgage over 25 years with a 10% deposit using the Bank of England borrowing calculator
