Affordability house crisis stretches beyond London
Lloyds bank have recently conducted a unique study that compares local house prices with local earnings, and it has concluded that the worst house prices are not in London, but in parts of the south-east.
Oxford is yet again identified as the least affordable city in the UK, with average prices at 10.68 times local earnings.
Second is Winchester at 10.54 times local earnings, which has seen the highest house price growth of any UK city in the last 10 years.
House prices have risen by 79% in the last ten years, from an average of £249,703 in 2006 to £446,796 in 2016. The fact that the city is one hour away from London by train, is making this city attractive to commuters, however, the local council says that soaring house prices have pushed locally born people out of the city, while finding works to fill lower-paid jobs is proving extremely difficult. London is in third at 10.06 times local earnings.
The study by Lloyds bank goes on to reveal that there is no longer a city in the south of England where house prices are less than seven and a half times average local incomes. “The housing affordability gap has widened to its worst level in eight years,” said the Lloyds analysis, stating that the last time prices were this high we were at the top of the boom in 2008, just before the financial crisis struck.
Worrying is that wage growth has fallen behind the rise in house prices, with affordability worsening for the third successive year. The average home in a city in the United Kingdom now costs 6.6 times average local earnings.
The ‘most affordable’ cities are in the north, Scotland and Northern Ireland, but even in these cities buyers will be stretched to afford a home based on local salaries on offer.
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Written by: The Team | On: March 29, 2016