£50k deficit in property purchase power between top and bottom ethnic groups

Official data from the Office of National Statistics this week outlines for the first time a disparity in the average earnings of different ethnicities. With earnings having a direct impact on mortgage eligibility, leading estate agent comparison site, GetAgent.co.uk, has analysed what this pay gap means on a housing affordability level.

The data on pay differences highlighted the gap in hourly pay for ten ethnic groups, surveyed via the ONS Annual Population Survey.

The difference in pay is significant, especially between the highest and lowest earning by way of hourly rates, with the lowest hourly pay earned by the Bangladeshi community at an average of £9.60. This is some 39% lower than Chinese workers, the highest-paid.

The Chinese community have also seen their average hourly rate rise by 36% since 2012 whilst those that are Black/African/Caribbean/Black British have seen their wage rise by only 9.53% over the same period, almost half the average of all ten groups analysed.

This difference in earning also has implications when it comes to buying a home. Housing affordability a hot topic, and with prices continuing to climb while wages have generally failed to keep pace, the latest data highlights how the high cost of buying a home isn’t just a generational or gender issue, but also one impacted by ethnicity.

For instance, house purchaser is determined by income where mortgages are concerned and the general criteria in assessing the amount that a buyer can borrow is based upon, typically, a 4.5x multiple of salary (Source: Mojo Mortgages).

Therefore, there is not only a drastic gap in the earnings between one ethnic group and another but also in ‘home purchasing power’.

As a matter of fact, notwithstanding any deposit paid, the difference between the home buying power of, for instance, a Chinese buyer versus a Bangladeshi buyer is a whopping £50,369.

Founder and CEO of GetAgent, Colby Short, commented:

“The struggle faced by many millennials when getting onto the property ladder and the issue of the gender pay gap has been well documented but as this latest data shows, this gap in pay is also a problem across different ethnic groups.

In fact, the gap between the top and bottom earning ethnic groups is far bigger than any male versus female issue.

Of course, this gap has a direct impact on the ability for many to buy a home and in this day and age, this simply shouldn’t be the case. More needs to be done to level the playing field whether it be based on age, gender or ethnic background in order to ensure that everyone has the chance to become a homeowner if they wish to do so.”

Ethnic Group
Annualised wage*
Mortgage availability**
Chinese
£28,665
£128,993
Indian
£24,515
£110,318
White British
£21,895
£98,527
Any other Asian
£21,021
£94,595
White Other
£20,621
£92,795
Mixed/ Multiple ethnic groups
£22,441
£92,795
Black/African/Caribbean/Black British
£19,874
£89,435
Other ethnic group
£19,874
£89,435
Pakistani
£18,200
£81,900
Bangladeshi
£17,472
£78,624
*Method: Hourly rate x 7 hours per day x 5 days x 52 weeks

 

**4.5x annual wage

ONS earnings data

 

Properganda PR

National and local media coverage for property businesses. Journo quotes delivered in minutes.

You May Also Enjoy

Letting Agent Talk

Letting Agency Owners: Are You the Bottleneck in Your Business?

As a letting agency owner, it’s easy to fall into the trap of wearing too many hats. But it’s not just exhaustion and burnout you need to worry about – it’s the impact it’s having on your bottom-line. Guest Blog By Sally Lawson – Agent Rainmaker “From managing client relationships and handling operations, to overseeing…
Read More
Breaking News

Latest developments in Renters’ Rights Bill: What landlords need to know

On the brink of becoming law, the Government last week rejected the majority of amendments put forward by the House of Lords, which would have mitigated the severity of some of the amendments. Property professionals, landlords and tenants are poised to navigate this once-in-a-generation overhaul of housing legislation.   Lucy Jones, Chief Operating Officer at…
Read More
Breaking News

What Will Commonhold Mean for Property Managers?

By Robert Poole, Director – Block Management, Glide Property Management, part of LRG The government’s ambition to end leasehold for most residential properties has put commonhold back into the spotlight. First introduced in 2002, commonhold offered a resident-led alternative to traditional leasehold ownership. However, legal and commercial complexity stalled adoption. Two decades later, policymakers are…
Read More
Breaking News

Think You Know Mortgages? These 5 Myths Could Be Costing You Money

When it comes to mortgages, most of us have had advice from family and friends. The trouble is, a lot of these so-called facts are myths, with many individuals missing out on better deals or opportunities, due to not doing their own due diligence. Emma Graham, Business Development Director at Hodge Bank, explained: “Mortgages are…
Read More
Breaking News

Just 17% of homes selling for more than £500k

The latest analysis by eXp UK has revealed that while just 17.4% of homes sold across England and Wales so far this year achieved a price of £500,000 or more, agents in London, the South East, and the East of England will face the greatest need to adapt should the Government press ahead with plans…
Read More
Breaking News

Estate agents back Rachel Reeves’ stamp duty shake-up but call for abolition without replacement tax

The latest research from GetAgent has revealed that the majority of estate agents in England are supportive of Chancellor Rachel Reeves’ plans to overhaul property taxation by scrapping Stamp Duty Land Tax (SDLT). However, 44% argue that the new levy should be focused only on higher-value homes, while 79% favour abolishing SDLT outright without introducing…
Read More