Average house price growth continues to outpace earnings but there are some parts of the country where homes are becoming more affordable, research suggests.
High house prices are one of the main factors stopping buyers getting on and moving up the property ladder.
Homebuyers may have been helped by mortgage rates falling in recent weeks and inflation hitting the Bank of England’s 2% target, but typical property values are still higher than earnings, making it hard for many to afford to buy a home.
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This is a slight improvement on the house price-to-earnings ratio of 3.9 that was recorded last year, with slower house price growth and higher wages in 2024 boosting the figure.
But the ratio also assumes two people purchase the property.
The 35% of homebuyers who are single will expect to pay 7.6 times their annual income on average, Zoopla said.
Tom Bill, head of UK residential research at estate agency brand Knight Frank, said affordability will be the single biggest factor shaping house price growth in the UK over the next few years.
He said: “Within the capital and around the country, demand is rising on the edge of traditionally popular locations as mortgage costs increase versus recent years and people establish their new work/life balance after the pandemic.”
There are some parts of the country where house price-to-earnings ratios are below average though, giving more options for affordable homes.
The most affordable areas to buy a home
House price-to-earnings ratios are important as it gives property buyers an indication of what they can afford based on their salary and household income.
Scotland and North England are home to the most affordable towns in the UK, according to Zoopla.
Ayrshire, in the southwest of Scotland, has a particularly high concentration of affordable towns to buy, with the average home in the four most affordable parts of Ayrshire - Cumnock, Girvan, Saltcoats and Ardrossan - valued at less than 1.3 times the annual household income.
Cumnock is Britain's most affordable town to buy, Zoopla said, with average property values of £80,300, significantly below the UK average house price of £267,500.
Shildon and Peterlee, both in county Durham, and Ashington in Northumberland are the most affordable towns for buyers in England, with homes valued at less than 1.4 times local household incomes, according to the research.
Swipe to scroll horizontally
Region
Postal town
Average value
Estimated annual household income
House price-to-earnings ratio
East Midlands
Gainsborough
£170,000
£70,500
2.4
East of England
Wisbech
£209,800
£70,900
3
South East
Dover
£250,000
£79,300
3.2
South West
Plymouth
£222,200
£68,300
3.3
Wales
Ferndale
£101,600
£67,700
1.5
West Midlands
Stoke-On-Trent
£139,200
£62,100
2.2
Yorkshire and The Humber
Hull
£119,800
£62,200
1.9
London
Croydon
£417,800
£84,800
4.7
North East
Shildon
£73,200
£65,800
1.1
North West
Workington
£123,700
£76,900
1.6
Scotland
Cumnock
£80,300
£75,800
1.1
The least affordable areas to buy a home
London, where the house price-to-earnings ratio is 5.8, as well as southern England, is home to the least affordable properties but the gap is narrowing.
Over the past 12 months, house prices fell by two-thirds in southern England excluding London, Zoopla said, with the largest improvements in affordability in the South East, South West and East of England.
Wisbech in Cambridgeshire and the coastal towns of Dover and Great Yarmouth are the most affordable places to buy in the south of England with affordability ratios in these areas ranging between 3 and 3.2.
However, eight in 10 towns across southern England are typically valued at more than four times the annual household income.
In contrast, 88% of towns in Scotland have a house value-to-earnings ratio below three.
There are some relatively affordable options for Londoners.
Croydon has the lowest house value-to-earnings ratio in the capital at 4.7, well below the London average of 5.8. Greenwich, and Barking and Dagenham, also see average homes valued at less than five times the local annual household income.
There are also 33 towns within commuting distance of London that have lower value-to-household ratios than Croydon. The most affordable are Chatham at 3.7 and Southend or Basingstoke at 3.9.
“Affordability remains a concern for many homebuyers so it is positive to see that there are areas of the UK, such as southern England, where the affordability of housing has improved,” says Izabella Lubowiecka, senior property researcher at Zoopla.
“London remains the least affordable area for home buyers. Those in London looking to get more for their money may want to consider buying in one of the South East and East of England’s commuter belt, where there are many towns that are more affordable than London. The same is true in markets around many regional cities and we see buyers seeking value for money.”
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Marc Shoffman is an award-winning freelance journalist specialising in business, personal finance and property. His work has appeared in print and online publications ranging from FT Business to The Times, Mail on Sunday and the i newspaper. He also co-presents the In For A Penny financial planning podcast.
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