The average price of a property in the UK is eight times the average wage, according to analysis of Office for National Statistics and Land Registry data.
When compiling data for all London boroughs and each area across England, Scotland and Wales to calculate property prices compared to wages earned, online estate agent eMoov found that affordability was a major issue in London, where the average house price is a staggering 14 times average earnings.
Topping the list of least affordable boroughs is Kensington and Chelsea; with an average property costing £1,212,375, buyers will pay 46 times the average wage of £26,624 in the area. This is followed by the City of Westminster, where the average property is valued at £1,028,617 - 31 times higher than typical wages of £33,020 in the borough.
Third on the list is outside of London in St Albans in Hertfordshire, where buyers will need 28 times the average wage of £18,928 to afford the average property of £522,716.
Other least affordable areas are South Bucks, in Buckinghamshire, where the house price to earnings ratio is 25 times higher the average house price costs £587,645, compared to a typical wage of £23,192 – and the Chilterns, where the salary to house price ratio is 24.
Affordability improves outside England
Home buyers looking for affordable properties should head for Wales and Scotland. In Wales, wages are just six times the average house price, while in Scotland, they are five times the average salary.
But the cheapest area of all where workers only need pay three times their salary is in Copeland in western Cumbria. This is followed by Wales Blaenau Gwent and Burnley in Lancashire, which both offer property prices at just four times the wage on offer.
Russell Quirk, founder and chief executive of eMoov, says: “Property values in England are significantly higher than the rest of the UK, which is reflected in the wages offered. However, the wages are not always consistent with property prices and have failed to increase at the same pace.
“It highlights the unaffordability of the market in England when you consider the difference in Wales, where the highest annual average wage is under £21,000 in Cardiff yet the city’s property value is merely third in the country behind regions with lower averages in annual incomes. Additionally, the average wage in Kensington and Chelsea would take almost a lifetime working to be able to afford a home, which is unrealistic for most let alone the average buyer.
“It is important to consider the wage you can earn when buying property to understand the longevity of the investment, as a lower property price doesn’t always mean a better quality of living as the wage will also reflect the local market and economy,” he adds.
The tables below detail the key findings.
|Region / Country||Average House Price (Current)||12 Month Change (%)||Average Annual Wage||House Price to Wage Ratio|
|UK Top Ten Most Unaffordable||Average House Price (Current)||12 Month Change (%)||Annual Wage||House Price to Wage Ratio|
|Kensington And Chelsea||£1,212,375||-6%||£26,624||46|
|City of Westminster||£1,028,617||11%||£33,020||31|
|Richmond upon Thames||£659,636||9%||£25,636||26|
|Hammersmith and Fulham||£746,570||-3%||£29,120||26|
|UK Top Ten Most Affordable||Average House Price (Current)||12 Month Change (%)||Annual Wage||House Price to Wage Ratio|
|Neath Port Talbot||£102,046||2%||£21,268||5|