View more on these topics

Affordability of city homes at 10-year low

House-and-Calculator-Mortgage-Property-700.jpgMore people are being priced out of urban property markets, with affordability of city homes now at a 10-year low.

Lloyds Bank’s Affordable Cities Review shows that average urban property is now seven times average annual earnings.

Over the past five years the average house price within UK cities has risen by 36 per cent, with average earnings in these areas growing by an average of just nine per cent.

The average city property is now priced at £232,945 – the highest it has even been. In contrast average earnings are just £33,420.

As a result affordability is at its worst level since 2007, just before  to the financial crash. At this time the average city property was 7.5 times average earnings.

This survey shows the least affordable city is Oxford, where average house prices (of £429,775) are over 11 times average earnings in the city.

In Truro, Exeter, Cambridge, Greater London, Brighton & Hove, Bath and Winchester average house prices are all more than 10 times average earnings.

Lloyds Bank mortgage products director Andy Mason says: “There is a clear north south divide, with only one southern location appearing in the top 20 most affordable cities, and only one northern location appearing in the top 20 least affordable.”

Lloyds’ research shows that house prices have grown fastest in Cambridge over the past decade, with a gain of 47 per cent from 2007. The average property in the city has risen from £288,403 to £422,589.

Prices have risen by 39 per cent in Brighton & Hove, 31 per cent in Greater London and by 29 per cent in both Canterbury and Cardiff over this period.

In the past five years house prices in Greater London have recorded the biggest rise, increasing by 61 per cent, from £298,940 in 2012 to £480,800 in 2017.

This research shows that Stirling remains the most affordable city for the fifth consecutive year, with the average property price – at £186,084 – just four times average annual earnings in the city. Bradford (4.5 times earnings) is England’s most affordable city.



Consumer credit needs MMR-style affordability checks: Ami

The Bank of England should apply MMR-style affordability checks to consumer credit, according to the Association of Mortgage Intermediaries.   The trade body’s latest quarterly economic bulletin points out that pressure on household income has led many to take out large amounts of debt.   The Bank of England has warned credit card, personal loan and […]


Borrowers lose out from tightened mortgage affordability

Consumers are set to lose out from the recent Bank of England decision to tighten mortgage affordability rules, experts say. The Bank said last week that lenders should test affordability by considering how borrowers would handle a 3 per cent increase in firms’ standard variable rates. Previously lenders assessed affordability by checking how homeowners would […]


Bank of England tightens mortgage affordability rules

The Bank of England has tightened mortgage affordability rules to prevent loosening underwriting standards, which it warns will cause some lenders to raise interest cover ratios. The Bank formerly said that lenders should test affordability by checking how borrowers would react to a three per cent increase in base rate. But the new rule says […]


News and expert analysis straight to your inbox

Sign up