The average house price in England is now almost eight times the average wage, sparking a call from councils to be allowed to invest significantly in house building.

New analysis from the Local Government Association (LGA) reveals that in 2000 the average house price was 3.96 times the average income, whereas last year a house was worth 7.72 times the average wage packet. In the south west, the figure was 8.54 times. Predictably, the most expensive region of the country to buy a house is London, where the average house is almost 12 times the average salary.

As part of its budget submission, the LGA is calling for an urgent investment in house building and infrastructure, to deliver the genuinely affordable homes the country needs. The UK has not built enough homes to keep up with demand since the 1970s, when 40 per cent of new homes were built by local authorities. Last year, councils lost more homes through the Right to Buy scheme than have been started in the last five years.

In addition to being able to borrow to build, councils are also asking to keep 100 per cent of their receipts from Right to Buy. Currently councils keep a third of replacement costs, with a portion of the other proceeds going to the Treasury.

Cllr Martin Tett, the LGA’s Housing spokesman, said: “When house prices are almost eight times the average income, it’s clear that we have a serious shortage of affordable homes, which is shattering the dream of home-ownership for too many people.”