The Lloyds Bank Affordable Cities Review has revealed a list of the most and least affordable cities in the UK by comparing average house prices and gross average earnings, and it is topped by Oxford.
The review found that affordability in general in the UK has fallen for now three years running with houses now at their least affordable for eight years.
The divide between the north and south also become yet more pronounced, with 17 of the 20 least affordable cities in the south of England.
Oxford topped the table, where the average house price of £364,429 is currently 10.68 times higher than the average earnings in the city. Oxford’s growth in unaffordability is likely down to its popularity as a commuter town for those working in London, something that fuels much of the house price growth in the south and south-east in particular.
Oxford was followed by Winchester in second and London in third with Cambridge, Bath, Brighton and Hove, Truro and St Albans making up the rest of the top ten.
The council in Winchester, where house prices have grown particularly fast recently, has expressed dismay that locals are increasingly being priced out of the Hampshire city, while those who can afford to live there are unlikely to be taking the relatively low paid jobs that are on offer in abundance.
Council leader Stephen Godfrey said “it’s a very big challenge for the council. We have more jobs here than the local working age population. Many public services jobs are not the highest salary payers and it is difficult to find people willing to take local jobs at these wages. Of the council’s 450 staff, only half live in the district.”
At the bottom of the table, Londonderry in Northern Ireland is officially the most affordable city in the UK where, at £113,302, the average house price is 3.8 times the average earnings. Bradford, Stirling, Hereford and Belfast complete the five most affordable cities.
The average house price in the UK is now £211,880 – 8% higher than in 2015 when the average was £196,229. Rics have predicted that within the next five years, average house prices will go up by another 25%. Over the past five years, house prices have grown fastest in London with the average property now costing 53% more than it did in 2011.
The average house currently costs 6.6 times the average salary, up from 6.2 last year. The average salary in the UK is currently £26,500 and wage growth has been consistently outstripped by house price inflation in recent years.
Lloyds Bank mortgage director Andrew Mason said “house prices in the past three years have risen more steeply than average wage growth, making it more expensive to buy a home in the majority of UK cities”.
He added, on the topic of the north-south divide, that “house prices in the South have generally seen stronger growth than in the North. Winchester has recorded the biggest gains over the past decade, whilst London, not surprisingly, has seen the largest growth during the economic recovery of the last five years”.