Housing affordability improved slightly in 2025, according to the latest data from the Office for National Statistics (ONS), though it remains stretched and uneven across regions.
In England, the average home cost £300,000, equivalent to 7.6 times median annual earnings (£39,300), down from 7.8 in 2024.
In Wales, the average price of £213,000 equated to 6.0 times earnings (£35,800), a marginal improvement from 6.1.
The shift reflects earnings growth continuing to outpace house price increases since 2021, with wages rising by around 25% compared with a 5% increase in property values.
Affordability improved in around two-thirds of local authorities across England and Wales (213 areas), but worsened in 103, highlighting ongoing regional disparities.
The most affordable areas were Hyndburn and Kingston upon Hull, both with ratios of 4.1, while Kensington and Chelsea remained the least affordable at 25.2.
Regional differences remain pronounced. In the North East, homes cost around 5.0 times average earnings, compared with 10.5 times in London, where buyers would need an additional £279,000 on top of five times average earnings to purchase an average-priced property.
Mary-Lou Press, president of NAEA Propertymark, said: “The latest data from the Office for National Statistics shows signs of improving housing affordability in many areas across England and Wales as earnings begin to outpace house price growth.
“However, from a property professional’s perspective, this reflects a market that is stabilising rather than fully recovering. Affordability remains stretched by historic standards, particularly for first-time buyers, and significant regional disparities continue to shape access to home ownership.”
“Wider global economic uncertainty and geopolitical unrest also have the potential to influence inflation, interest rates and supply chains, which could impact future housing affordability and market stability,” Press added. “Ultimately, without a sustained increase in housing supply and continued support for buyers, affordability challenges will remain a key issue across both the sales and rental markets.”
Nick Statman, CEO of Bettermove, highlighted that for many first-time buyers “the challenge of entering the market still remains significant”.
He continued: ““Deposits are a major blocker while recent reports of lenders pulling sub-4% mortgage offers may also impact buyer confidence.”
“Affordability also varies significantly by region, which could contribute to more first-time buyers looking beyond London towards regional cities where entry prices are lower and overall affordability is more achievable.”
“Improved affordability can sometimes encourage more experienced investors to re-enter the market. However, instead, we are seeing signs that some smaller landlords are reassessing their portfolios against new regulatory requirements.”
“We are also seeing more landlords exploring flexible sale routes to exit the market quicker, particularly where properties are tenanted or where a traditional sale may take longer.”
Vann Vogstad, CEO of COHO, a UK shared living marketplace platform, added: “Improving housing affordability does not automatically mean housing pressure is easing. In many cases, the opposite dynamic can occur.
“Homeownership is still out of reach for many pushing up rents as more landlords look to exit the market.”
“For many, especially smaller landlords, the complexity and risk associated with regulatory reforms such as the Renters’ Right Act can push them to sell.”
“We recently spoke to more than 10 of our landlords. Government tax and legislative changes means 70% will be forced to raise their rent prices this year, and a quarter will have to spend between £100,000 and £300,000 over the next five years to ensure their properties meet the minimum EPC Band C standard by 2030.”
“However, this is leading to a gradual professionalisation of the rental sector.”
Read the orginal article: https://propertyindustryeye.com/first-time-buyers-hit-hardest-as-regional-divide-grows/?utm_source=rss&utm_medium=rss&utm_campaign=first-time-buyers-hit-hardest-as-regional-divide-grows
