The average house price was £290,000 last year compared to an average annual income of £35,100.
That’s according to figures published by the Office for National Statistics (ONS). It means that houses now cost an average of 8.3 times average income.
This figure is down a little from 2022, when it was eight-and-a-half times income.
In Wales, the average house price is £196,500, and the average full-time income is £32,400, so homes are 6.1 times income.
The ONS added that average house prices have now been above the ‘affordability threshold’ of five times income for 22 years.
Rising prices
The average (median) price of homes sold in England and Wales increased by £9,500, or 3.4%, between the 12 months ending September 2022 and the 12 months ending September 2023. At the same time, the average earnings increased by £1,900, or 5.6%.
Across England and Wales, newly built homes were, on average, less affordable than existing properties (10.3 times earnings compared with eight times earnings in 2023).
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Houses are frankly unaffordable at the moment. The pandemic property boom ratcheted up the cost of property, and while wages are growing faster at the moment, they fell so far behind house prices in recent years that there’s acres of ground yet to be made up. It means buyers in England are having to find an astonishing 8.3 times their income to buy a home.
“This would be hard enough at a time of rock-bottom interest rates, but the fact these have climbed so significantly means the bottom rung of the property ladder is at head height. The question is how we can stretch to more expensive properties without rupturing something important.”
Least affordable areas
The least affordable area in England is Kensington and Chelsea, where property costs 34.2 times earnings.
The most affordable local authorities in 2023 were Burnley and neighbouring Hyndburn, which had ratios below four.
Related: Official: House prices fell in the year to January to £281,913
