Which is the least affordable city to buy a home in the UK?

Which is the least affordable city to buy a home in the UK?

Which is the least affordable city to buy a home in the UK?

According to Britain’s biggest lender, the Halifax Bank, Winchester is the least affordable city to buy a home in the country.

Its figures suggest buying a home in the Hampshire commuter city will cost 14 times average earnings, higher than Greater London at 11 times. Central London would be much higher.

Typically, buying a property in a UK city will now set buyers back 8.1 times their average earnings, up from 5.6 times a decade ago.

House prices have “generally continued to outstrip wage growth”, said Halifax managing director Russell Galley.

Winchester has leapfrogged Oxford as the least affordable city in the annual survey, while Londonderry is the most affordable for the third year in a row.

In the Northern Ireland city, a home will cost 4.7 times average earnings.

Over the past year, the Halifax reckons the average house price in UK cities has grown by 10.3%.

Its analysis of figures from the Office for National Statistics suggests average earnings for people living and working in cities climbed just 2.1% over the same time period.

Average city house prices increased to £287,440, while comparable average earnings rose to £35,677.

Surprisingly, cities are slightly more affordable than the average for the UK as a whole, according to the figures.

But that may partly reflect more people moving out of cities in search of more space during the pandemic.

A home in Winchester will now set buyers back an average £630,432, up 8% in the last year.

That leaves it with the highest average house prices of any UK city, ahead of St Albans at £604,423 and London at £564,695.

The least expensive average house prices among cities are in Londonderry at £155,917 and Hull £156,924.

Average earnings in Winchester are £45,059, higher than for the UK as a whole and only beaten by St Albans at £59,391 and Greater London at £51,257.

Where can you find more affordable places to buy a property?

There is some good news: in one in nine UK cities, property has become more affordable in the last 12 months.

Housing affordability improved in seven cities compared with a year earlier: Oxford, Carlisle, Portsmouth, Durham, Salford, Inverness and Glasgow.

According to the figures, Carlisle and Aberdeen are now more affordable than five years ago, while Inverness is the only city more affordable than 10 years ago.

An average home there costs 5.6 times average earnings, down from 6.2 in 2011, as wage growth there has outstripped house price growth.

“Affordability is significantly better in the North and there are now just two cities – Plymouth and Portsmouth – with better-than-average affordability in the South,” said Mr Galley.

The top 20 least affordable cities in 2021

(Figures show the price-to-earnings ratio followed by the average house price and average annual earnings. Source: the Halifax)

  1. Winchester, South East, 14.0, £630,432, £45,059
  2. Oxford, South East, 12.4, £486,928, £39,220

=3. Truro, South West, 12.1, £356,788, £29,558

=3. Bath, South West, 12.1, £476,470, £39,508

  1. Chichester, South East, 10.6, £446,899, £37,352
  2. Cambridge, East Anglia, 11.9, £482,300, £40,492
  3. Brighton and Hove, South East, 11.6, £449,243, £38,737
  4. London, South East, 11.0, £564,695, £51,257

=9. St Albans, South East, 10.2, £604,423, £59,391

=9. Chelmsford, South East, 10.2, £424,690, £41,781

  1. Salisbury, South West, 10.0, £392,355, £39,154
  2. Exeter, South West, 9.9, £323,554, £32,635
  3. Leicester, East Midlands, 9.7, £279,080, £28,725
  4. Hereford, West Midlands, 9.7, 316,929, 32,839
  5. Norwich, East Anglia, 9.4, £306,946, £32,632
  6. Bristol, South West, 9.3, £346,902, £37,357

=17. Southampton, South East, 9.0, £310,435, £34,429

=17. Canterbury, South East, 9.0, £365,168, £40,565

=17. Gloucester, South West, 9.0, £287,600, £31,987

  1. Worcester, West Midlands, 8.8, £303,132, £34,389

The top 20 most affordable cities in 2021

(Figures show the price-to-earnings ratio followed by the average house price and average annual earnings. Source: the Halifax)

  1. Londonderry, Northern Ireland, 4.7, £155,917, £33,138

=2. Carlisle, North, 4.8, £163,232, £34,087

=2. Bradford, Yorkshire and the Humber, 4.8, £164,410, £34,219

=4. Stirling, Scotland, 5.4, £208,927, £38,744

=4. Aberdeen, Scotland, 5.4, £205,199, £38,016

=4. Glasgow, Scotland, 5.4, £196,625, £36,205

  1. Perth, Scotland, 5.5, £203,229, £36,700

=8. Inverness, Scotland, 5.6, £191,840, £34,373

=8. Hull, Yorkshire and the Humber, 5.6, £156,424, £27,730

  1. Dundee, Scotland, 5.8, £181,150, £31,344
  2. Sunderland, North, 6.0, £179,567, £29,745
  3. Lisburn, Northern Ireland, 6.1, £203,386, £33,138

=13. Salford, North West, 6.2, £211,903, £34,444

=13. Durham, North, 6.2, £196,274, £31,762

=13. Liverpool, North West, 6.2, £215,741, £34,911

=13. Belfast, Northern Ireland, 6.2, £205,228, £33,138

=13. Lancaster, North West, 6.2, £217,392, £35,004

  1. Newcastle-upon-Tyne, North, 6.3, £229,434, £36,212
  2. Stoke-on-Trent, West Midlands, 6.5, £200,161, £30,698
  3. Edinburgh, Scotland, 6.8, £285,605, £42,245

(Source BBC).

The report shows further evidence of an exodus from London and the larger cities following the pandemic. Thousands of people are now working from home so commuting hundreds of miles is not an issue for the time being.

However, if employers start asking staff to return to the office in the City of London commuting from Devon and Cornwall will be a challenge!

With the rush to beat the stamp duty holiday now over property prices are starting to cool. Property investors should see a return to a more normal market in the coming months. I am definitely noticing more price reductions and properties coming back on the market after a sale fell through.

You can make money in property in any market if you know how, and you don’t even need to use your own money. You can start with zero capital using many of the ‘no money down’ strategies.

Would you like to learn more about making money from property?

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