Nationwide Building Society’s Local Affordability Report
- London borough of Kensington and Chelsea least affordable; East Ayrshire in Scotland remains most affordable
- North East has smallest gap between least and most affordable boroughs, London has largest
- 25% of local authorities have seen an improvement in affordability since 2016
- Westminster, Cambridge, Reading and Aberdeen amongst areas which have seen largest improvements, due to earnings growth outpacing house price growth
- Around 45% of local authorities now have an HPER of 6+, compared with c35% in 2016
Commenting on the figures, Andrew Harvey, Senior Economist, said:
“Our recent Affordability Report identified that affordability was becoming more stretched across all regions. However, there is also considerable variation within those regions and in this special report we explore this further.
“We’ve updated our local affordability metrics, which use house price and earnings data from the Land Registry & Office for National Statistics (ONS) to give the most comprehensive view at a local level.
“As illustrated by the chart in the attached, London has by far the greatest gap between the least and most affordable boroughs, while the North East has the smallest.
Least affordable local authorities
“Our data shows the least affordable local authorities, as measured by the first time buyer house price to earnings ratio (HPER) within each government office region (using data for 2021). Note that data is not available for Northern Ireland.
| Least affordable local authorities | ||
| Govt Office Region | Local Authority | HPER
(2021) |
| London | Kensington and Chelsea | 14.7 |
| South East | Oxford | 10.1 |
| East of England | Hertsmere | 10.0 |
| South West | Cotswold | 8.6 |
| East Midlands | Rutland | 7.3 |
| Yorkshire* | Ryedale | 7.0 |
| West Midlands | Malvern Hills | 6.8 |
| North West | South Lakeland | 6.7 |
| Wales | Vale of Glamorgan | 6.4 |
| Scotland | City of Edinburgh | 5.9 |
| North East | North Tyneside | 4.3 |
* Refers to Yorkshire and The Humber
“Based on the latest data, Kensington and Chelsea remains the least affordable local authority in London and by extension Great Britain, with a HPER of 14.7.
“Oxford remains the least affordable area in the South East, with house prices 10.1 times average earnings in the region, up from 9.2 a year ago. House prices in Oxford have risen 14% over the past year, one of the strongest increases in the South East.
“Hertsmere in Hertfordshire continues to be the least affordable local authority in the East of England government region, with average prices 10 times average earnings. This area is traditionally prime London commuter territory, taking in towns such as Borehamwood and Potters Bar.
“Most authorities in the South West have seen a deterioration in affordability over the last year, but Cotswold replaced Bath and North East Somerset as the least affordable area, with a house price earnings ratio of 8.6. This district includes sought after towns such as Cirencester, Tetbury and Moreton-in-Marsh.
