The period between 2020 and 2021 saw a sharp increase in affordability ratios indicating worsening affordability - however, by 2024, affordability ratios have stabilised. In England, the median house price was £290,000, equating to 7.7 times the median annual earnings of full-time employees (£37,600), a significant decrease from the radio of 8.4 seen in 2023. In Wales the median house price stood at £201,000, representing 5.9 times the median annual earnings (£34,300). - a decease from 6.2 the previous year.
Between 2023 and 2024, housing affordability improved in 289 of the 318 local authorities (91%), while 28 (9%) experienced a decline in affordability - the most affordable local authorities were Blaenau Gwent (ratio of 3.8), Burnley (3.9), and Blackpool (3.9). In contrast, Kensington and Chelsea remained the least affordable, with a ratio of 27.1, making it approximately seven times less affordable than the most affordable areas.
Over the five-year period from 2019 to 2024, four of the ten largest increases in affordability ratios (indicating worsening affordability) were observed in the East Midlands. Conversely, the ten most significant decreases in affordability ratios occurred in London boroughs, suggesting improving affordability in these areas.
Mark Eaton, chief operating officer at April Mortgages, comments: “Housing affordability may have improved to pre-pandemic levels, but it remains a major barrier to homeownership for many people.
“House prices are worth over 10 times average earnings across large parts of southern and central England, rising to 16 times income in the most unaffordable areas.
“Despite an overall convergence in house prices and wage growth, many buyers are still struggling with mortgage affordability.
“While there is no magic bullet that will completely fix the problem, there are steps borrowers can take to increase their buying power.
“One of the issues is that borrowers are often too short-term focused with the market encouraging them to take out two or five-year fixed deals.
“Modern longer-term mortgages of 10 years or more can help borrowers to qualify for larger loan amounts of up to 6x joint incomes.
“There needs to be greater education and awareness of these products, as they could help many more people get a foot on the property ladder.”
