A new measure of UK housing affordability shows the gap between earnings and house prices has widened over the past decade.
The geospatial intelligence platform EvaluateLocate reports that average residential property costs are rising faster than average earnings, putting homeownership out of reach for many.
EvaluateLocate’s UK Housing Affordability Multiple tracks the ratio of average local earnings to average house prices across the UK, from postcode districts upward. Over the past ten years, average earnings have increased by 31%, while residential values have risen by 53%.
The current national affordability multiple is just over 8x, with some areas showing higher levels of pressure. In Greater London, the average multiple is 12x, with some districts exceeding 20x. Since 2015, affordability multiples have also increased sharply in Birmingham, Bristol, and Manchester.
Heatmaps produced by EvaluateLocate highlight regions where housing is least affordable, with red areas representing multiples between 8x and 11x or higher.
Of the sample cities below, only Newcastle has seen a rise in residential values which has effectively been counteracted by an increase in average earnings while Leeds is also almost at parity in comparison to 2015.
EvaluateLocate CEO, Adam Kirby, commented: “This data reveals the huge range of affordability throughout the country with a trend in the majority of locations for a growing gap between increases in earnings and the price of an average home.
“It will be interesting to see if this affordability situation ultimately results in residential price corrections or if a growing number of people will turn to the evolving private rented sector for a long-term solution to their housing needs.”
“We’ve recently seen some mortgage providers edge up their rates and this may contribute further to the immediate problem of affordability. An abolition of Stamp Duty might help get the market moving, but obviously this is not on the immediate horizon and could actually stimulate the headline prices of homes if it takes place.”
Read the orginal article: https://propertyindustryeye.com/uk-housing-affordability-shows-sharp-regional-gaps-across-the-country/?utm_source=rss&utm_medium=rss&utm_campaign=uk-housing-affordability-shows-sharp-regional-gaps-across-the-country
