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House prices marginally more affordable in UK’s most expensive cities

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Affordability may have improved slightly in London, Cambridge and Oxford, but buying a home is still out of reach for many
House prices marginally more affordable in UK’s most expensive cities

The UK’s most expensive cities for homebuyers have become slightly more affordable, according to Zoopla.

But don’t get too excited.

The property portal found that in London the average house price (£483,100) now stands at JUST 13.1 times the average Londoner’s earnings, a return to levels last seen in June 2015. This is down from a high of 14.1 times earnings two years ago (June 2017).

In other expensive cities, Cambridge and Oxford, where house prices now sit at ONLY 12.2 and 11.9 times average earnings respectively, there has been a similar improvement, with affordability levels back to those seen in mid-2015.

However, the average house price to earnings ratio across the whole UK is much more achievable – 6.7 times average earnings.

Richard Donnell, director at Zoopla, said: “Housing affordability is slowly starting to improve in London as earnings growth outstrips house price inflation. There has been a clear downward trend in the ratio of house prices to average earnings over the last 2 years.

“However, the scale of improvement is relatively modest. While welcome news, the gap between earnings and prices needs to close further in order to make a material difference to would-be purchasers.”

Where are prices rising?

Edinburgh and Liverpool are clear front-runners in the house price growth league, each experiencing annual house price growth of +5.8%, to reach £236,900 and £125,500 respectively.

Only two cities have recorded annual house price falls for July 2019, said Zoopla – Aberdeen (with a fall of 4.8% to £160,100) and Oxford (falling by 0.4% to £405,600).

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