Buyers face affordability north south divide, says YBS

Homeowners are facing a north south divide when it comes to housing affordability, research reveals.

Analysis reveals the average house price in some areas of the country is more than 20 times the average wage.

Research by Yorkshire Building Society shows affordability in 46 per cent of 346 local authorities across the UK has got worse since the financial crisis. Affordability has worsened in every London borough as well as the south east and east of England.

YBS analysed earnings data from the Office for National Statistics and Land Registry house price data over the past 10 years to determine how housing affordability has changed since the financial crisis.

It found affordability has improved in 54 per cent of local authorities including Edinburgh, Birmingham, Peterborough and Leeds. In these areas wages have increased at a faster rate than property values.

Overall, UK affordability has improved by just 0.6 per cent since September. But the regional picture is more varied with an improvement in Scotland and Wales of 18.9 per cent and 17.2 per cent respectively, and a decline of 3.3 per cent in England.

The worst areas are Three Rivers, Hertfordshire and Haringey, London where affordability is down 61 per cent over the past decade.

Also among the least affordable areas is Westminster, London where the average house price has almost doubled from £539,759 in 2007 to £1.03 million today – more than 24 times the average wage.

Homes in London are typically 38.8 per cent less affordable than they were a decade ago, and 15.4 per cent worse in the east and south East of England.

UK-Sinking-Debt-GBP-Currency-Money-700x450.jpg

Inverclyde, Scotland has seen the biggest improvement in affordability at 42.5 per cent. The average house price to earnings ratio in the area has dropped from 6.38 to 3.67 over the past decade.

Also among the most affordable areas is Burnley in the north west of England, where the average house price has fallen from £94,174 to £77,629.

The north east has seen the biggest regional improvement at 25.9 per cent.

YBS chief economist Andrew McPhillips says: “There is a distinct divide between the north and south of the country when it comes to housing affordability and this has become even more pronounced since the financial crash.”

He adds: “Across London and large swathes of southern England it has become increasingly difficult for first-time buyers and those wanting to move up the housing ladder. However, the north of England, Wales and Scotland present a different picture entirely.”

Recommended

Bank of England BoE Bank 480
2

Rate rise of up to 3% predicted by early 2020s

A former Bank of England Monetary Policy Committee member has predicted that interest rates could rise to 2 or 3 per cent by the early 2020s. Now senior economic adviser at PWC, Andrew Sentance (pictured) was speaking at the Building Society Association conference in London earlier today, and also estimated that the UK will lose about […]

UK Residential Homes Houses London 480

Experienced landlords expand portfolios

Landlord portfolios have increased to a new high of 1.44 rented homes on average, according to figures from Countrywide. The latest Countrywide Monthly Letting Index shows that the number of landlords in the UK has dropped by 154,000 since 2015. Despite that, the number of rented homes across the country has increased to 5.1 million. […]

Estate-Agent-To-Let-Buy-Sign-700.jpg

TMW scraps fees and launches new products

The Mortgage Works is set to launch two new fixed-rate buy-to-let remortgage products. TMW, the specialist buy-to-let arm of Nationwide Building Society, will launch a two-year and a five-year deal on Wednesday. The 50 per cent loan-to-value deals are only available until 4 October 2017. The rate on the two-year deal is 1.39 per cent […]

Newsletter

News and expert analysis straight to your inbox

Sign up