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Our latest research highlights the gap in mortgage affordability between men and women due to the gap in their average salary.

The deficit between the average salary for men and women and the ever-increasing cost of homeownership are two widely debated topics. But what does it look like when you combine the two?

We looked at the latest ONS data for the average wage over a 10-year period (2006-2016) for both men and women and then looked at their mortgage affordability at 4.5 times that wage. We then highlighted the gap in purchase power between the two showing mortgage availability as a percentage of the average house price at the time.

The Last 10 Years

Over the last 10 years, the average mortgage affordability of male home buyers has been 72% of the average house price, 15% more than female home buyers (57%). This deficit remained around this level until 2013. It peaked at 17% in 2009 with the male salary allowing a 79% mortgage availability on the average house price, to just 62% for women, with the higher threshold of affordability largely due to the market crash.

mortgage affordability

Since, the gap has begun to close and today sits at 12%, but with house price again finding their way back to their pre-crash peaks, mortgage affordability for the average salary has fallen to 65% for men and 53% for women.

Despite the gap, the high cost of UK homeownership means that since 2006 both average wages have lagged behind house prices where mortgage affordability is concerned.

By Property Type

The 2009 slump in house prices saw the highest mortgage availability as a proportion of the average house price, with men tipping 52% for a detached property, 83% for a semi-detached home, 97% for a terraced property and 91% for the average flat. In contrast female mortgage affordability only hit 41% for a detached home, 65% for a semi, 76% for a terraced house and 71% for a flat.

Today that has again fallen, with men sitting at 43% of the average value of a detached house, 69% of a semi-detached, 80% of a terraced house and 72% of a flat. For women, this falls to 35% of a detached house, 56% of a semi-detached property, 65% of a terraced home and 58% of a flat.

It’s a welcome sight that the gap in salary between men and women, and in turn mortgage affordability, has started to close over the last few years, but a gap remains none the less. Homeownership provides enough hurdles for the current generation of first and second time buyers as it is, without gender having to play a role.

The only saving grace is that many are in the position to buy with their partner and so the combined mortgage affordability of both is enough to see them onto that first rung of the ladder.

While the increasing growth in property values due to a severe lack of supply is an issue the second side to it is the lack of growth in the average wage. If this was addressed, it would at least go some way in bridging the gap for those struggling to buy at present.

Russell Quirk

Founder & CEO, eMoov.co.uk