- The gap between city house prices and average salaries is the widest since the credit crisis, says report by Lloyds Bank
- Affordability in cities has worsened with house prices rising as a multiple of average annual earnings from 5.5 in 2012 to 6.9 in 2017
- The top five least affordable cities for homebuyers are Oxford, Great London, Winchester, Cambridge and Chichester
The gap between city house prices and average salaries is the widest since the credit crisis, research revealed today.
It found that the ratio of average house prices to earnings has reached 7.2, the highest level since 2008. It reveals the true extent of how unaffordable buying a home has become in many parts of the country.
The research by Lloyds Bank attributed the increase to a 32 per cent rise in house prices from £169,966 in 2012 to its highest ever level of £227,926 in 2017.
The famous university city of Oxford has been named as the least affordable places to live in the country
The most affordable cities are listed in green and the least affordable in red, with the figure showing the ratio of average house prices to earnings
At the same time earnings have risen by only seven per cent to £32,796.
It means average affordability in cities has worsened with house prices rising as a multiple of average annual earnings from 5.5 in 2012 to 6.9 in 2017.
It was last higher than this in 2008 when the average house prices to earnings stood at 7.2.
The ratio stretches into double figures for the top five least affordable cities, which are Oxford, Great London, Winchester, Cambridge and Chichester.
Top of the list of 61 cities published by Lloyds Bank is Oxford, where the average house price is £385,372.
It is almost 11 times the annual gross average earnings in the city of £36,033.
Lloyds Bank also highlights a North South divide, with Lichfiled, York and Leicester being the only cities that appear in the top 20 least affordable UK cities.
Cambridge has been named as one of the least affordable cities to buy a home in the research by Lloyds Bank
Chichester in West Sussex is also named as one of the least affordable cities for homebuyers
Lloyds said central London boroughs are ‘significantly less affordable’ than Greater London
The least affordable city is Stirling, with the average property price of £173,847 being 3.7 times average gross annual earnings.
Londonderry in Northern Ireland is the second most affordable city at 3.8 times the typical annual salary.
Londonderry, Belfast and Lisburn in Northern Ireland are also among the most affordable cities, along with Bradford and Sunderland in northern England and Swansea in Wales.
Andy Mason, Lloyds Bank’s mortgage product director, said: ‘City living is becoming increasingly expensive with average house prices at least 10 times average annual earnings in five of the UK’s cities.
‘Affordability levels have worsened for four consecutive years as average city house prices continue to rise more steeply than average wage growth.’
The cathedral city of Winchester is named as one of the top five least affordable cities
St Albans in Hertfordshire recorded the biggest price rise of any city during the past decade, with a 65 per cent gain between 2007 and 2017.
The average house price in the city, which is popular with London commuters, currently stands at £515,899.
London has seen the fastest house price growth in the last five years, with a rise of 57 per cent rise, taking prices to £467,001.
Lloyds said the average house price-to-earnings ratio in London disguises considerable variations across the borough, with central London boroughs being significantly less affordable than Greater London.
The bank used house prices from its own database as well as Office for National Statistics (ONS) average earnings figures for the research.
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