Which is the least affordable city
to buy a home in the UK?
According to Britain’s
biggest lender, the Halifax Bank, Winchester is the least affordable city to
buy a home in the country.
Its figures suggest
buying a home in the Hampshire commuter city will cost 14 times average
earnings, higher than Greater London at 11 times. Central London would be much
higher.
Typically, buying a property in a UK
city will now set buyers back 8.1 times their average earnings, up from 5.6
times a decade ago.
House prices have
"generally continued to outstrip wage growth", said Halifax managing
director Russell Galley.
Winchester has
leapfrogged Oxford as the least affordable city in the annual survey, while
Londonderry is the most affordable for the third year in a row.
In the Northern
Ireland city, a home will cost 4.7 times average earnings.
Over the past year,
the Halifax reckons the average house price in UK cities has grown by 10.3%.
Its analysis of
figures from the Office for National Statistics suggests average earnings for
people living and working in cities climbed just 2.1% over the same time
period.
Average city house
prices increased to £287,440, while comparable average earnings rose to
£35,677.
Surprisingly, cities
are slightly more affordable than the average for the UK as a whole, according
to the figures.
But that may partly
reflect more people moving out of cities in search of more space during the
pandemic.
A home in Winchester
will now set buyers back an average £630,432, up 8% in the last year.
That leaves it with
the highest average house prices of any UK city, ahead of St Albans at £604,423
and London at £564,695.
The least expensive
average house prices among cities are in Londonderry at £155,917 and Hull
£156,924.
Average earnings in
Winchester are £45,059, higher than for the UK as a whole and only beaten by St
Albans at £59,391 and Greater London at £51,257.
Where can you
find more affordable places to buy a property?
There is some good
news: in one in nine UK cities, property has become more affordable in the last
12 months.
Housing
affordability improved in seven cities compared with a year earlier: Oxford,
Carlisle, Portsmouth, Durham, Salford, Inverness and Glasgow.
According to the
figures, Carlisle and Aberdeen are now more affordable than five years ago,
while Inverness is the only city more affordable than 10 years ago.
An average home
there costs 5.6 times average earnings, down from 6.2 in 2011, as wage growth
there has outstripped house price growth.
"Affordability
is significantly better in the North and there are now just two cities -
Plymouth and Portsmouth - with better-than-average affordability in the
South," said Mr Galley.
The top 20 least
affordable cities in 2021
(Figures show the
price-to-earnings ratio followed by the average house price and average annual
earnings. Source: the Halifax)
1. Winchester, South
East, 14.0, £630,432, £45,059
2. Oxford, South
East, 12.4, £486,928, £39,220
=3. Truro, South
West, 12.1, £356,788, £29,558
=3. Bath, South
West, 12.1, £476,470, £39,508
5. Chichester, South
East, 10.6, £446,899, £37,352
6. Cambridge, East
Anglia, 11.9, £482,300, £40,492
7. Brighton and
Hove, South East, 11.6, £449,243, £38,737
8. London, South
East, 11.0, £564,695, £51,257
=9. St Albans, South
East, 10.2, £604,423, £59,391
=9. Chelmsford,
South East, 10.2, £424,690, £41,781
11. Salisbury, South
West, 10.0, £392,355, £39,154
12. Exeter, South
West, 9.9, £323,554, £32,635
13. Leicester, East
Midlands, 9.7, £279,080, £28,725
14. Hereford, West
Midlands, 9.7, 316,929, 32,839
15. Norwich, East
Anglia, 9.4, £306,946, £32,632
16. Bristol, South
West, 9.3, £346,902, £37,357
=17. Southampton,
South East, 9.0, £310,435, £34,429
=17. Canterbury,
South East, 9.0, £365,168, £40,565
=17. Gloucester,
South West, 9.0, £287,600, £31,987
20. Worcester, West
Midlands, 8.8, £303,132, £34,389
The top 20 most
affordable cities in 2021
(Figures show the
price-to-earnings ratio followed by the average house price and average annual
earnings. Source: the Halifax)
1. Londonderry,
Northern Ireland, 4.7, £155,917, £33,138
=2. Carlisle, North,
4.8, £163,232, £34,087
=2. Bradford,
Yorkshire and the Humber, 4.8, £164,410, £34,219
=4. Stirling,
Scotland, 5.4, £208,927, £38,744
=4. Aberdeen,
Scotland, 5.4, £205,199, £38,016
=4. Glasgow,
Scotland, 5.4, £196,625, £36,205
7. Perth, Scotland,
5.5, £203,229, £36,700
=8. Inverness,
Scotland, 5.6, £191,840, £34,373
=8. Hull, Yorkshire
and the Humber, 5.6, £156,424, £27,730
10. Dundee,
Scotland, 5.8, £181,150, £31,344
11. Sunderland,
North, 6.0, £179,567, £29,745
12. Lisburn,
Northern Ireland, 6.1, £203,386, £33,138
=13. Salford, North
West, 6.2, £211,903, £34,444
=13. Durham, North,
6.2, £196,274, £31,762
=13. Liverpool,
North West, 6.2, £215,741, £34,911
=13. Belfast,
Northern Ireland, 6.2, £205,228, £33,138
=13. Lancaster,
North West, 6.2, £217,392, £35,004
18.
Newcastle-upon-Tyne, North, 6.3, £229,434, £36,212
19. Stoke-on-Trent,
West Midlands, 6.5, £200,161, £30,698
20. Edinburgh,
Scotland, 6.8, £285,605, £42,245
(Source BBC).
The report shows
further evidence of an exodus from London and the larger cities following the
pandemic. Thousands of people are now working from home
so commuting hundreds of miles is not an issue for the time being.
However, if
employers start asking staff to return to the office in the City of London
commuting from Devon and Cornwall will be a challenge!
With the rush to
beat the stamp duty holiday now over property prices are starting to cool.
Property investors should see a return to a more normal market in the coming
months. I am definitely noticing more price reductions and properties coming
back on the market after a sale fell through.
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