Workers pay 7.8 times annual earnings on buying a home

Michael Lloyd

March 28, 2019

Full-time workers paid an estimated 7.8 times their annual earnings on purchasing a home in England and Wales in 2018, ONS statistics have found.

Housing affordability in England and Wales stayed at similar levels in 2018, following five years of decreasing affordability. At the local level, London boroughs had the widest range of estimated housing affordability; more than three times the range of any other region.

Andrew Montlake, director of mortgage broker, Coreco, said: “Super prime London may have cooled but for average house prices to be 44.5 times average annual earnings underlines how alien it remains compared to the rest of the UK.

“Even by London standards, average prices in the super prime boroughs of the capital are frankly Venutian.

“For anyone trying to get on the ladder in London, these figures are a stark reminder of just how difficult it is.

“The far wider range of affordability in the capital compared to the rest of the UK suggests there is no such thing as one London, just a multiplicity of mini Londons.

“That affordability hasn’t improved in one single local authority is proof positive of how the lack of supply has propped up house prices despite ongoing market uncertainty.

“While getting a foot on the ladder in certain regions of the UK is eminently achievable, in others it is borderline impossible for a significant chunk of the population.

“It’s no surprise that we are seeing such a fundamental shift towards the private rented sector.

“Unless you’ve got a sizeable deposit and a pretty decent income, buying in the south east corner of the UK is little more than a pipe dream.”

Copeland, in the North West of England, remained the most affordable local authority in England and Wales in 2018; with average house prices being 2.5 times average workplace-based annual earnings.

Kensington and Chelsea remained the least affordable local authority in 2018, with average house prices being 44.5 times workplace-based average annual earnings.

There are 77 local authorities that became less affordable over the last five years. Most were in London, the South East and the East of England and there were no local authorities in which affordability improved.

In 2018, newly-built dwellings were estimated to be significantly less affordable than existing dwellings.

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