This is the scary news coming out of the Office for National Statistics UK. Since 2020, average salaries of office and general workers have not risen AT ALL with the exception of 2020. In fact, the average salary FELL in 2021 TO 2022.
Couple that with the cost of inflation year on year and you get a double whammy.
Salaries remain stagnant while costs of things from basic necessities, to petrol and education, everything is biting into the average Briton's pockets.
Only a small percentage of Britons fully own their own homes. At last check, it was 36%, and another 30% have outstanding mortgages on their homes.
The typical fixed mortgage is 5.7% per annum for 5 year tenure.
Over the last 5 years, the average house price rose from GBP 249,309 to GBP 268,000 or at a nominal appreciation in total of 7.5 % over 5 years or about 1.4% compounded each year.
This means that even if you own a property (flat or house) the increase in the value of property cannot offset the costs of inflation of 4 to 8% per annum. Added to the fact that there is mortgage interest to pay too.
At the end, the people who own houses, when they need funds (if they do not have emergency funds) when they sell ; they will liquidate and either :
a) rent
b) move to a lower cost country
c) downgrade to a more inexpensive property.
It is a rather frightening situation to be in.
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