UK house prices: Oxford and London named as least affordable cities for home buyers, says new report

Properties in British cities now cost an average of seven times local salaries
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Lizzie Rivera1 March 2017

Oxford has once again been rated as the UK's least affordable city for home buyers, but London is closing the gap.

House price rises have outpaced earnings across the country for the past five years, and "home affordability" is now at its worst level since 2008, according to the Lloyds bank's Affordable Cities Review.

The report measures the ratio between average house prices in cities across the UK and the average salaries of people who live there.

At £385,000, average property prices in Oxford are almost 11 times more than the £36,000 gross average wages earned by residents of the famous university city.

London is the second least affordable city in which to buy a home, but has recorded the highest house price growth over the past five years so the affordability gap between the capital and Oxford is closer than it's ever been.

Average wages in Greater London haven't grown anywhere near as quickly as house prices, with the average cost of a home now 10.5 times the average London worker's salary of £45,000.

Ten least affordable UK cities to buy a home

UK city Region Average UK City House Price Average Full Time Earnings (Mean) Price to Earnings Ratio
Oxford South East £385,372 £36,033 10.7
Greater London Greater London £467,001 £44,563 10.5
Winchester South East £467,821 £44,744 10.5
Cambridge East Anglia £387,380 £37,429 10.3
Chichester South East £375,919 £37,611 10
Brighton & Hove South East £359,710 £37,603 9.6
Bath South West £360,907 £38,842 9.3
Southampton South East £266,109 £29,041 9.2
Salisbury South West £304,657 £33,249 9.2
Canterbury South East £311,305 £35,782 8.7

North-South divide
The report also reveals a significant North-South divide, with the most affordable cities all located outside southern England. The former Scottish capital of Stirling tops the list with an average property price of £174,000, just 3.7 times higher than average local earnings of £46,000.

Londonderry in Northern Ireland is the UK's second most affordable city and Swansea in Wales also makes the top 10.

Meanwhile, the Midlands' Lichfield and Leicester, and York in the north, are the only cities outside southern England which appear in the list of 20 least affordable UK cities.

“Affordability levels have worsened for four consecutive years as average city house prices continue to rise more steeply than average wage growth," says Andy Mason, mortgage products director for Lloyds.

“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, while London has been the top performer during the recovery.”

Ten most affordable UK cities to buy a home

UK city Region Average UK City House Price Average Full Time Earnings (Mean) Price to Earnings Ratio
Stirling Scotland £173,848 £46,368 3.7
Londonderry Northern Ireland £117,776 £30,641 3.8
Bradford Yorkshire & Humberside £130,497 £29,625 4.4
Belfast Northern Ireland £140,636 £30,641 4.8
Hereford West Midlands £207,908 £43,857 4.7
Lisburn Northern Ireland £145,952 £30,641 4.8
Sunderland North £139,282 £28,252 4.9
Durham North £145,547 £29,076 5
Glasgow Scotland £165,370 £31,733 5.2
Swansea Wales £151,867 £28,989 5.2

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