Insel affe
HellBilly
The housing market is dictated by supply and demand. Average annual income is £25k, so a couple earning this should be able to borrow £175k, on your reckoning, which would buy a decent first time property at todays market rates, providing, of course,that they have the required deposit . A lot of people earn more than this and will use this spending power to buy the home they want, without being restricted by lending ratios.
Try and buy a one bedroom flat in a decent area in London for that sunshine, you will be hard pushed unless you wanna live in a drug and gang infested area.