fbpx

YBS: Buying a home has become more affordable

Michael Lloyd

December 11, 2019

Buying a home has become more affordable this year according to an analysis from Yorkshire Building Society.

Buying a home has become more affordable in nearly two-thirds of local authority areas in the UK in 2019, however homes continue to be less affordable than seen pre-crisis in nearly half (49%) of local authority areas.

This year, wages have increased faster than house prices in 233 areas, improving affordability for homebuyers.

Nitesh Patel, strategic analyst at Yorkshire Building Society, said: “In the past year, we’ve seen house price growth continue to slow, stall completely, or even fall.

“At the same time, salaries have increased, which means wage growth has begun to catch up with house price growth.

“This is why we’ve seen more affordable house prices in the vast majority of places.

“This is most striking in London, where six of the capital’s boroughs occupy the ten largest increases in house price affordability.

“But it’s important to remember, this is all relative. London still has some way to go before house prices are truly affordable for someone on median earnings.

“On average, house prices in the capital are 13 times average earnings, with this increasing to almost 20 times in some areas.

“This means that buying a home in these areas may well be out of reach for people earning the average London salary, even in households where there are two working adults.”

In some parts of the UK, where house prices have stalled or fallen, the prices of homes relative to earnings has dropped by more than 20%.

Patel added: “House prices have grown by an average of 43% since 2009 – twice as fast as earnings (21%) in the same period.

“The difficulty in affording to buy a home is one reason why house sales have not picked up in the past year, even though some of the key drivers for housing market remain positive.

“The longer-term outlook for people wanting to buy a home remains to be seen.

“Demand for homeownership is still strong and supply is limited, so over the short-to-medium term, house prices could increase faster than earnings.

“This may continue to cause issues for home buyers, particularly those buying their first home.”


Sign up to our daily email