News Article

An interesting read from London Loves Property - UK’s most expensive cities for homebuyers become more affordable

Zoopla’s UK Cities House Price Index for July 2019 focuses on trends in housing affordability as measured by the ratio of house prices to average earnings at a city and national level.

Weak house price growth and continued growth in average earnings means housing affordability is starting to improve across the highest value markets where affordability levels have been most stretched. This trend has accelerated as areas register localised price falls and earnings growth accelerates, reaching +3.7% in June 2019 according to the Office for National Statistics.

In London the average house price (£483,100) now stands at 13.1x the average Londoner’s earnings, a return to levels last seen in June 2015. This is down from a high of 14.1x two years ago (June 2017). Despite this modest improvement, the London ratio today remains well ahead of the 20-year house price to earnings ratio average (9.9x).

In other expensive cities, Cambridge and Oxford, where house prices now sit at 12.2x and 11.9x average earnings respectively, there has been a similar improvement, with affordability levels back to those seen in mid-2015. The southern cities of Bournemouth, Southampton, Portsmouth and Bristol, which have the next highest affordability ratios of 7.5x to 9.7x, have recorded a small decrease in the house price to earnings ratio since 2016 as price growth has dropped below the growth in average earnings. Across the UK, the average house price to earnings ratio is 6.7.

CityCurrent price – July 2019%yoy Jul-19Average annual earnings – single earnerPrice to earnings ratio 2019 Q2
London £483,100 0% £37,100 13.1
Cambridge £427,900 0% £34,900 12.2
Oxford £405,600 0% £33,900 11.9
Bournemouth £293,100 1% £30,000 9.7
Bristol £293,100 1% £30,500 9.2
Portsmouth £238,200 1% £30,400 7.9
Southampton £228,500 1% £30,500 7.5
UK £220,500 2% £33,000 6.7

Richard Donnell, Research and Insight Director at Zoopla said, “Housing affordability is slowly starting to improve in London as earnings growth outstrips house price inflation. There has been a clear downward trend in the ratio of house prices to average earnings over the last 2-years.

“However, the scale of improvement is relatively modest. While welcome news, the gap between earnings and prices needs to close further in order to make a material difference to would be purchasers. The changing picture is not limited to London.

“There are 12 cities where the annual growth in house prices is below the growth in average earnings which is running at 3.7%. Lower-priced cities in northern England are actually getting less affordable than their southern counterparts when you consider that the annual percentage growth in house prices is outstripping earnings growth.”

FULL CREDIT FOR THIS ARTICLE TO - LLP EDITOR, LONDON LOVES PROPERTY - https://londonlovesproperty.com/uks-most-expensive-cities-for-homebuyers-become-more-affordable/

Posted on: 2 September 2019

Share:


Recent Articles

14 April 2021

Buyer Demand Soars As Stamp Duty Holiday Is Extended

Buyer demand spiked by 24% in the week following the Budget as people scrambled to take advantage of the stamp duty holiday extension . Overall demand was also 80% higher in that same week compared to the same time period over the previous four years, due to a combination of the tax break...

Read More

9 December 2020

House Price Growth Close To Three-Year High

The housing market is tipped to have its busiest Christmas for more than a decade, as buyers rush to beat the stamp duty holiday deadline, according to our House Price Index. The housing market is set to have its strongest December – and lead-up to Christmas – for more than a...

Read More

22 June 2020

Coronavirus - An Updated Message From Daboraconway

Throughout these challenging times we are continually reviewing the measures in place to safeguard the wellbeing of all. Preparations to reopen our 3 Branches have been completed in line with guidelines issued by the Government on 13 th  May 2020. We opened our doors to clients on...

Read More
Rightmove Zoopla Primelocation On The Market The Property Ombudsman Trading Standards Institute My Deposits Safeagent