Homes cost 8 times the average earnings – research

New research highlights the average UK home costs eight times the average wage, with some London homes between 21 and 46 times the pay on offer.

Hybrid lettings agent eMoov compared ONS data of the most recent earnings estimates (setting wages at £528 on average) with the average property price (£216,750) as calculated by the Land Registry’s July 2016 UK house price index.

According to the study, the least affordable area in the UK is the London Borough of Kensington and Chelsea, where homes cost 46 times the average wage. The English capital is also the most expensive area in the UK, with properties 14 times the average annual earnings.

Scotland is the most affordable country, with properties costing five times the money on offer while in Wales properties are priced six times the average pay.

In England prices are on average nine times the wage on offer, but properties cost between 10 and 20 times the average wage in nearly all of the south and west of England.

Russell Quirk, founder and CEO of eMoov, said the findings underline the “unaffordability of the market” in England:

“Property values in England are significantly higher than the rest of the United Kingdom, 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.”

Region  / Country

Average House Price (Current)

12 Month Change (%)

Average Annual Wage

House Price to Wage Ratio

Wales

£144,828

4%

£24,617

6

Scotland

£143,711

3%

£27,404

5

United Kingdom

£216,750

8%

£27,440

8

England

£232,885

9%

£26,884

9

London

£484,716

12%

£34,320

14

 


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

St Albans

£522,716

19%

£18,928

28

Richmond upon Thames

£659,636

9%

£25,636

26

Hammersmith and Fulham

£746,570

-3%

£29,120

26

South Bucks

£587,645

14%

£23,192

25

Camden

£809,804

5%

£32,084

25

Chiltern

£512,910

9%

£21,320

24

Wandsworth

£606,891

9%

£26,260

23

Harrow

£442,348

10%

£19,292

23


UK Top Ten Most Affordable


Average House Price (Current)


12 Month Change (%)

Annual Wage

House Price to Wage Ratio

Copeland

£114,011

3%

£37,492

3

Blaenau Gwent

£79,715

10%

£19,968

4

Burnley

£75,455

3%

£18,824

4

North Lanarkshire

£97,875

2%

£21,684

5

County Durham

£96,883

-3%

£21,008

5

East Ayrshire

£91,839

5%

£19,916

5

Pendle

£92,663

3%

£19,708

5

Merthyr Tydfil

£94,907

1%

£19,968

5

Neath Port Talbot

£102,046

2%

£21,268

5

Stoke-on-Trent

£102,877

7%

£21,008

5