Home-buying affordability improves but mainly in the North

Recent research indicates a slight improvement in home-buying affordability across the UK, with notable regional disparities. According to Halifax’s 2024 Affordability Review, the average house price-to-earnings ratio has decreased to 6.55, down from 6.62 last year. This shift is attributed to a 5% increase in average wages, surpassing the 3.8% rise in house prices over the same period.

Mortgage costs have also become more manageable, with payments now constituting 29% of income, a reduction from 33% previously. However, affordability improvements are not uniform across the country. Northern Ireland, for instance, experienced an increase in its house price-to-earnings ratio from 4.88 to 5.09, driven by a 10% surge in house prices.

In England, regions such as the North West, South East, and Yorkshire & Humberside have seen their ratios rise, indicating reduced affordability. London maintains the highest average house price at £539,238, but its ratio of 8.22 is lower than the South East’s 8.96, which remains the highest among all regions.

Conversely, the North East of England stands as the most affordable region, with a ratio declining from 4.56 to 4.38. This improvement results from a 2.4% increase in house prices being outpaced by a 7% rise in average income.

At the local level, Elmbridge in Surrey is identified as the least affordable area in the UK, with a ratio of 17.54, though this marks a decrease from 19.46 last year. In contrast, Kingston upon Hull in East Yorkshire emerges as the most affordable, boasting a ratio of 3.15.

These findings underscore the complex landscape of housing affordability in the UK, where national averages may not fully capture the varied experiences across different regions.

Source: Estate Agent Today