New figures produced by Zoopla’s research team shows for the first time the huge scale of regional variations in terms of housing affordability.
Analysis of 20 major cities in Britain, the portal says that in London the average house price of £483,100 now stands at 13.1 times the average Londoner’s earnings.
This sounds expensive but is actually down from a high of 14.1 times some two years ago; despite this modest improvement, the London ratio today remains well ahead of the 20-year house price to earnings ratio average which is 9.9 times
In two other expensive cities - Cambridge and Oxford - house prices now sit at 12.2 and 11.9 times average earnings respectively.
Other southern cities - Bournemouth, Southampton, Portsmouth and Bristol - have the next highest affordability ratios of 7.5 to 9.7 times,.
“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 two years” explains Richard Donnell, research and insight director at Zoopla.
“Although the likes of London, Oxford, Cambridge are at their most affordable levels in four years, the price to earnings ratio remains well ahead of the 20-year average. Some cities to the north of England and Scotland are more affordable now when compared to 2007 but, with more scope for future house price growth, the price to earnings ratio is set to rise slowly in the coming years” he adds.
The table below shows a very divided Britain in terms of house price affordability, with locations from Birmingham northwards house prices with far lower multiples of average local earnings.
|City||Current price - July 2019||%yoy - July 2019||Average yearly earnings - single earner||Price to earnings ratio - Q2 2019|