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House prices: most and least affordable regions


04-09-2017

 

Homes cost up to 14 times more than salaries in some parts of the UK, loveMONEY analysis reveals.

Northern Ireland is the most affordable place to live in the UK while London is the most expensive, new research has found.


loveMONEY analysed ONS figures to discover the average salary in every UK region and measured it against the average house price in every UK region to find out what areas are most and least affordable for homebuyers.


The affordability of housing in each region was calculated by dividing average house prices by the average annual salaries in each region to secure an affordability value.

Northern Ireland was the most affordable region in the UK, with the average salary (£25,750) amounting to just over a fifth – 20.76% – of the average house price (£124,000).

This was followed closely by the North East of England, where the average salary accounts for 20.55% of the average home. In third place was Scotland, which has an affordability ratio of 19.45%.

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North/South divide

The affordability gap between the North and South remains vast.

Our research revealed London to be the most unaffordable region to live in the UK.

With house prices averaging £488,000 and salaries of £34,882, earnings in this region account for just 7.14% of the average house price.

In other words, the average house costs 14 times more than a typical Londoner earns.

The South East and the East of England closely follow the capital, with average salaries accounting for under 10% of the average house price.

Meanwhile, the North West, Yorkshire and the Humber and the West Midlands sit firmly in the middle, with affordability values of between 17% and 14%, making these regions almost twice as affordable as London.
Homeownership 'out of reach' for families

Graeme Brown, interim chief executive at housing charity Shelter, claims it is “crystal clear” homes being built today are both second-rate and out of reach financially for millions of families.

“This is because the enormous cost of land means developers make big compromises on the quality and affordability of the homes they build, to ensure they make their money back.

"While it suits land owners and land traders fine, ordinary families pay the price. Nothing is going to change until the government calls time on this rigged system.

"Only by embracing a new approach that reduces the cost of land, such as New Civic Housebuilding, will we finally be able to offer the high quality and genuinely affordable homes that communities desperately need."
The government argues that, with new housing incentives such as the Help to Buy scheme, it is doing everything it can to help people find a home of their own.

“We’re committed to helping more people find a home of their own with the support of a range of low-cost home ownership products,” Gavin Barwell, Housing and Planning Minister said.

“Our Help to Buy Equity Loan scheme continues to make home ownership a reality for thousands of people, especially first time buyers right across the country.”

The most and least affordable UK regions to buy a home

UK region

Average house price (£)

Average annual salary (£)

Affordability value (%)

Northern Ireland

124,000

25,750

20.76

North East

125,000

25,688

20.55

Scotland

143,000

27,820

19.45

Wales

146,000

25,604

17.53

North West

151,000

26,166

17.32

Yorkshire and The Humber

151,000

25,911

17.16

West Midlands

181,000

26,520

14.65

East Midlands

175,000

25,126

14.35

South West

241,000

26,260

10.9

East Of England

277,000

27,497

9.92

South East

313,000

29,432

9.4

London

488,000

34,881.6

7.147

 

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