Lower earners in England ‘need 13 times income to buy an average-priced home’
A lower-wage household in England would need 13 times their income to buy an average-priced home, according to Office for National Statistics (ONS) analysis.
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The ONS looked at ratios of house prices to annual disposable household incomes in 2024.
The report, which identified those on lower incomes as being at the point of the lowest 20 per cent, said an average-priced home would cost 9.2 times a lower-income household’s income in Wales, 7.8 times in Scotland and 7.5 times in Northern Ireland.
The report used a threshold of five years of income as a broad indicator of affordability.
In England, only the highest-income 10 per cent could afford an average-priced home with fewer than five years’ income.
And in London, an average home was deemed unaffordable (at more than five times income) for any household income decile.
In the South East, east of England and South West, the average home was affordable only to the top 10 per cent.
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In London, an average-priced home was the equivalent of 34.6 years of income for households at the bottom 10 per cent of incomes marker, while in the south-east England an average-priced home would cost the equivalent of 20.7 years of income for those at the bottom 10 per cent.
An average-priced home in the North East cost the equivalent of 8.5 years of income for a low-income household earning at the point of the bottom 20 per cent of incomes, compared with 25 years in London, the research found.
In Wales and Scotland, an average home was deemed affordable to those in the top 40 per cent of incomes, and in Northern Ireland, an average home was deemed affordable to those with an average or higher income.
The median average house price to disposable household income affordability ratios were 7.9 in England, 5.4 in Wales, 5.3 in Scotland and 4.6 in Northern Ireland, in the financial year ending 2024.
In the financial year ending 2024 the median average home sold for £290,000 in England, £200,000 in Wales, £185,000 in Scotland and £168,000 in Northern Ireland.
The report said Northern Ireland’s incomes have increased more quickly than house prices in the past five years, resulting in homes selling for less than five times average household income in the financial year ending 2024.
The average disposable household income was around £37,000 in England and Wales, £35,000 in Scotland and £36,000 in Northern Ireland in the financial year ending in 2024.
The report was released on the same day that the Bank of England base rate was held at 4 per cent, with some mortgage rates having edged up in recent weeks.
The ONS said: "In all four countries, affordability improved in (the financial year ending) 2024 as ratios decreased compared with the previous year."