“In the North East, County Durham has the lowest house price to earnings ratio at 3.1. Covering a relatively large area, it is quite mixed and includes the cathedral city of Durham, former mining towns such as Bishop Auckland, and ‘new towns’ Peterlee and Newton Aycliffe.
“Merthyr Tydfil remains the most affordable local authority in Wales. The town has a rich industrial heritage and while average house prices have risen over the past year they are still amongst the lowest in the principality.
“Barnsley has replaced North East Lincolnshire as the most affordable area in the Yorkshire and The Humber government office region.
“In the West Midlands, Stoke-on-Trent continues to have the lowest house price to earnings ratio at 3.8. While Stoke has seen a pickup in price growth over the last year, it remains the cheapest area in the region by some margin.
“Meanwhile, in the East Midlands, the district of Bolsover remains the most affordable and also lowest priced area.
“Meanwhile, on the east coast, Great Yarmouth in Norfolk continues to have the lowest house price to earnings ratio in the East of England region, despite seeing above average price growth over the last year.
“Swindon remains the most affordable area in the South West, with a house price earnings ratio of 5.4. While prices in Swindon have risen over the last year, they remain lower than some of the surrounding areas in part due to relatively high levels of new housing construction.
“Southampton has replaced Dover as the most affordable region in the South East region, with average first time buyer prices 5.6 times average earnings. Southampton is also the cheapest area in the region, with relatively low price growth over the last year.
“Bromley is the most affordable borough in London, though its house price earnings ratio of 7.4 is still higher than most local authorities across the country. Indeed, Bromley is less affordable than the least affordable authorities in seven out of the 11 regions.
Which areas have seen the greatest improvement in affordability?
“The table below shows the areas that have seen the biggest improvement in housing affordability over the past five years, by comparing the first time buyer house price to earnings ratios in 2016 and 2021. Note that in Wales, no authorities have seen an improvement in this period.
| Govt Office Region | Local Authority | HPER
2016 |
HPER
2021 |
Chg. (ppts) |
| London | Westminster | 18.1 | 14.3 | -3.8 |
| East of England | Cambridge | 10.3 | 8.8 | -1.5 |
| South East | Reading | 7.6 | 6.4 | -1.2 |
| Scotland | Aberdeen City | 4.6 | 3.4 | -1.2 |
| Yorkshire* | Craven | 6.5 | 5.5 | -1.0 |
| East Midlands | South Holland | 5.3 | 5.0 | -0.3 |
| North East | Middlesbrough | 3.6 | 3.3 | -0.3 |
| North West | Eden | 6.0 | 5.9 | -0.2 |
| West Midlands | Walsall | 4.8 | 4.6 | -0.1 |
| South West | Swindon | 5.5 | 5.4 | -0.1 |
* Refers to Yorkshire and The Humber
“Westminster has seen the biggest improvement in affordability over the period, with the average first time buyer house price to earnings ratio falling from 18.1 to 14.3. This was driven by a combination of lower prices (13% lower than five years ago) and higher earnings (up 10% compared with 2016).
“While it is still one of the less affordable areas in the East of England, Cambridge has seen a marked improvement in affordability over the last five years, as earnings growth in the city has outpaced house price growth over this period.
“In Scotland, Aberdeen continued to see the greatest improvement in affordability, with average first time buyer HPER declining from 4.6 to 3.4 in the last five years. This is predominately due to the 22% fall in prices over the period.
“Craven in Yorkshire and The Humber, which is centred around the market town of Skipton, saw its HPER improve from 6.5 to 5.5.
“Affordability gains in other regions have been more modest. Overall, 25% of local authorities in Great Britain have seen an improvement in affordability compared with 2016, while first-time buyer house price earnings ratios have risen in 72% of authorities, with the balance unchanged.
“The chart in the attached report shows the distribution of local first time buyer house price to earnings ratios and how this has changed since 2016. While there is quite a wide range, there has been a noticeable increase in the proportion of local authorities with higher HPERs over the last five years. Around 45% of authorities now have a HPER of six or more, compared with c35% in 2016. Only 14% of localities now have a HPER below four, down from 22% five years ago.
“This helps to illustrate the challenge that many first time buyers across the country face, in terms of raising a deposit to purchase their first home. Further, the cost of servicing a mortgage as a share of take-home pay is now above its long-run average in the majority of UK regions. To read more about this, please see our affordability report.
“Affordability data for all local authorities, alongside all of our usual monthly and quarterly reports can be found at www.nationwidehousepriceindex.co.uk.”
