Housing affordability in England and Wales has returned to similar levels seen before the pandemic, thanks to stronger wage growth outpacing property prices, according to the Office for National Statistics (ONS).
Key Highlights
- In 2023, the average home in England cost 7.7 times the average full-time wage (£290,000 vs £37,600)
- In Wales, the average home cost 5.9 times the average wage (£201,000 vs £34,300)
- This marks an improvement from ratios of 8.4 in England and 6.2 in Wales in 2023
- Wage growth of 20% since 2021 outpaced house price increases of only 1%
Affordability Trends
Although affordability has improved, homes are considered truly “affordable” only when they cost less than five times annual earnings. In 2024:
- Only 9% of local authority areas meet this affordability standard
- Up from 6% in 2023 — the highest level since 2015
- In 1997, 88% of areas were considered affordable, highlighting long-term deterioration
Best and Worst Areas for Housing Affordability in 2024
Most Affordable:
- Blaenau Gwent (Wales): 3.8
- Burnley (North West England): 3.9
- Blackpool (North West England): 3.9
Least Affordable:
- Kensington & Chelsea (London): 27.1 (down from 33.4 in 2023 and a peak of 44.0 in 2018)
Notable Regional Changes:
- Staffordshire Moorlands (West Midlands): ratio rose from 5.8 in 2019 to 7.3 in 2024
Expert Insights
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown:
“Wages have risen faster than house prices in recent years, so would-be buyers are inching slightly closer to being able to afford a home of their own.”
“Still, 7.7 times income is a huge stretch, especially with stubbornly high interest rates.”
“To improve affordability, build the biggest deposit you can — from savings, Lifetime ISAs or family help.”
What’s Next for Buyers?
- From April 2024, stamp duty discounts will shrink, reducing “nil rate” thresholds
- Stamp duty applies in England and Northern Ireland
- Average deposit needed: around £50,000, posing a major hurdle for first-time buyers
Toby Leek, President of NAEA Propertymark, added:
“Despite improved ratios, entry into the market remains difficult. High deposits and elevated interest rates continue to pressure first-time buyers.”
