Housing affordability improved last year as the median average house price in England at £290,000 was equal to 7.7 times average full-time earnings of £37,600.
The latest index from the Office for National Statistics shows the affordability ratio has improved from 2023, when the average house price was equivalent to 8.4 times income in England.
Affordability was also better in Wales, where the median average house price of £201,000 was equivalent to 5.9 times average earnings of £34,300, down from 6.2 times earnings in 2023.
In both England and Wales, ratios have returned to pre-pandemic levels following a sharp worsening of affordability during 2020 and 2021.
In London, average house prices were 11.1 times earnings last year, down from a peak of 12.9 in 2021.
In 2024, 9% of local authorities across England and Wales – or 27 out of 318 – had average house prices of less than five times average earnings and were therefore deemed “affordable”.
This is the highest proportion since 2015, but far lower than in 1997 when the data series began and 88% of areas met the definition of affordable.
Housing affordability improved in 91% of LAs in England and Wales and worsened in 9% since 2023.
Kensington & Chelsea was the least affordable LA with a house price to earnings ratio of 27.1, while the most affordable were Blaenau Gwent (with a ratio of 3.8), Burnley (3.9) and Blackpool (3.9).
Planning and development consultancy Pegasus Group’s senior economics director Richard Cook says: “While the dial is beginning to turn on housing affordability, the fact remains that the income to house price ratio has gotten worse over the last decade, and we are still above the affordability ratio of 2014.
“The affordability ratio needs to come down in the long term. As it stands, one year is not a trend, it’s an anomaly.
“With mortgage providers only willing to lend on 4.5 times one’s salary, it remains near impossible to get a foot on the ladder with the way that income to house price ratios are going.
“The pressure is now back on the government to build more homes to bring affordability down further and improve economic growth.
“Today’s figures paint a clear picture; housing is still a crisis for every region in the UK.”
