Housing affordability worsens over last five years
The latest research has revealed that housing affordability has significantly worsened over the last five years.
According to the Office For National Statistics data on Housing Affordability in England and Wales report, 69 local authorities across England and Wales have seen housing affordability worsen during the last half a decade, with over 75% of these being in the South East, the East and London.
Affordability of housing is calculated by dividing the prices of homes by yearly earnings. It’s important to note that the statistics do not account for all income, they are instead based on full-time employee gross earnings, meaning that data on part-time workers and income received through other means is not included.
Whilst the house price data used can be revised each quarter, the annual affordability ratio statistics are not revised to reflect this every three months.
The data revealed that in 2017, full-time workers, on average, could expect to pay approximately 7.8 times their yearly workplace-based earnings when purchasing a home in England and Wales. Since 2016, this represents a substantial increase of 2.4%.
Statistics also revealed that those working full time in England and Wales would typically spend 7.6 times their yearly earnings on an existing property, rising to 9.7 times this when purchasing a new build.
The most affordable local authority was in the North West, with median house prices in Copeland being just 2.7 times median workplace based earnings here.
In contrast, the least affordable local authority was Kensington & Chelsea, with median house prices here being 40.7 times median workplace-based earnings.