Homebuyers in some parts of the UK would need to fork out nearly 50 times their earnings to buy near work, new data reveals – while others could secure a home for less than three times their income.
On average, a UK full-time worker could expect to pay around 7.8 times their annual salary buying a home in England and Wales in 2018 – but there is huge variation across the UK, as the latest housing affordability data from the Office for National Statistics suggests.
Here, you can compare how affordable your area is, find out where Brits spend the most on their mortgage and how to choose where to buy a house.
Where are the UK’s most and least affordable areas?
The map below shows the affordability of each local authority in England and Wales.
The figures show the average house price as a multiple of the average salary in that area. Areas in light blue are the most affordable; areas in dark blue the least affordable. There is no data for the areas in grey.
It may be unsurprising to find the least affordable places are in London and the South East of England, while you’ll have much better chance of being able to buy a house if you work in North West England and South Wales.
Copeland in Cumbria was revealed as the most affordable place to buy a house UK-wide, with average house prices just 2.5 times the annual salary.
Meanwhile, workers in Barrow-in-Furness, Pendle and Burnley would all need to spend less than four times their annual salary to buy locally.
At the other end of the spectrum is Kensington and Chelsea, the UK’s least affordable area. Here, local workers would have to fork out 44.51 times their annual salary to buy a house – meaning very few people that work in this area would have the luxury of owning a property nearby.
But this isn’t the case for the whole of London. Hop across the river to Lambeth, and properties become almost 60% cheaper. Indeed, Lambeth’s house prices measure at 14.49 times the average salary – comparatively affordable, if still prohibitive for most people.
Tower Hamlets came out as London’s most affordable area, with house prices at an average of 9.84 times locals’ salaries. This is far more affordable than the likes of Stratford-on-Avon (which came out at 10.41), Daventry (10.27) and Basildon (10.59).
So while the average wage in London is likely to be higher than Daventry, for instance, it’s all relative if you want to buy a house in the area where you work.
Find out more: buying a house or flat in London
How much will you spend on your mortgage?
Even if you can afford a property in your desired area, you should consider what your monthly mortgage payments will be. Data from Halifax shows how much of people’s post-tax earnings was spent on monthly mortgage payments.
As well as having the most affordable house prices, Copeland was revealed to have the cheapest mortgage payments, too. Homeowners in Copeland spend just 13.2% of their income on their mortgages.
In gloomy news for Londoners, the city came out bottom again – on average, residents see 46.8% of their paychecks disappear on their mortgage every month. This goes against most lenders’ affordability tests, which look for a maximum of 35% of wages to be spent on mortgage payments.
The least affordable mortgage title goes to Brent, where the average resident’s mortgage is eating up a huge 67.8% of their disposable earnings.
The table below shows a regional breakdown of how much people spent on their mortgage throughout the UK in the last three months of 2018.
|Region||Monthly mortgage payment as % of salary, after tax|
|Yorkshire and the Humber||22.6%|
|North West England||22.0%|
|South West England||34.1%|
|South East England||38.8%|
On a country-level, mortgage payers in Scotland and Northern Ireland see the smallest dent in their wallets, with less than a fifth of their pay being spent on their mortgage.
Homebuyers in Wales spend around a quarter of their pay on their mortgages, though this may be skewed by prices in Cardiff.
Find out more: how to buy a house
Where can I afford to buy?
It can be difficult to find the right area to buy in, that’s both affordable and somewhere you want to live. Here are a few tips to help you make that important decision:
How much can you borrow?
Mortgage lenders will commonly lend you up to 4.5 times your annual income to buy a property. If you’re buying with someone else, they’ll use your joint income.
Some may offer you a smaller or larger loan, depending on your circumstances, your credit history and how much of a risk they deem you to be.
Our borrowing calculator below can give you an idea of how much a lender is likely to give you to put towards a home. Simply enter your annual income.
If buying a home still seems out of reach, you may need to build up your deposit. This will reduce the amount you need to borrow, and can secure you a more favourable mortgage rate.
Find out more: how much can you borrow?
Which areas suit your lifestyle?
Do you want a short commute? Somewhere close to your friends and family? Somewhere near good schools, a park, or lots of shops?
You’ll need to take some time to think about which factors are most important to you, and narrow down your options from there.
If you’re looking for somewhere to live in England, you can use our area comparison tool to compare local authorities with each other, or with the national average, on measures such as school Ofsted ratings, house prices and even average life expectancy.
Which areas fit your budget?
While average prices can give you a general idea of how much properties cost in certain areas, there’ll be a lot of variation within that.
For example, if you’re buying a three-bedroom house in an area predominantly full of flats, you may find the average price doesn’t really represent the kind of property you’re after.
Instead, you’ll need to look at how much specific properties are being listed for, and how much they’ve recently sold for. You can compare these figures to your own finances and see whether you’re likely to be able to afford to buy in that area.
Find out more: finding the best places to live