Home affordability at nine-year low
The average house price in the famous university city is £385,372, which is nearly 11 times (10.7) average earnings at £36,033.
Over the past five years, the average UK city house price has risen by 32% from £169,966 in 2012 to its highest ever level of £224,926 in 2017, said the mortgage lender.
But at the same time average city annual earnings have risen by only 7% to £32,796. As a result, average affordability in the nation’s cities has worsened with house prices rising as a multiple of average annual earnings from 5.5 in 2012 to 6.9 in 2017.
Affordability in UK cities is, on average, now at its worst since 2008 when the ratio of average house price to earnings stood at 7.2.
There are five cities with average house prices at least 10 times average annual earnings. In addition to Oxford, these are Greater London (10.5), Winchester (10.5), Cambridge (10.3) and Chichester (10.0). The London average figure disguises considerable variations across the capital with central boroughs significantly less affordable than the Greater London average.
There is also a notable North – South divide. Lichfield (8.3), York (7.6) and Leicester (7.6) are the only cities outside southern England which appear in the top 20 least affordable UK cities.
The UK’s most affordable city is the former Scottish capital of Stirling with an average property price of £173,847, 3.7 times average gross annual earnings.
Andy Mason, Lloyds Bank mortgage products director, said: “City living is becoming increasingly expensive with average house prices at least ten 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.
“House prices in the south have generally seen stronger growth than in the north. St Albans has recorded the biggest gains over the past decade, whilst London has been the top performer during the recovery.”