UK housing affordability reaches highest level in over a decade

UK housing affordability has reached its most favorable level in over a decade. According to analysis by Lloyds, the average UK home now costs approximately 7.3 times the average earnings, the lowest price-to-earnings ratio since 2015.

The bank attributed this improvement to wage growth outpacing house price increases over the past year. For first-time buyers, the average home costs just under six times earnings, with a ratio of 5.9.

Regional data shows significant variations. London and the South East remain the least affordable areas, though both saw improvements; London’s ratio fell from 10.9 to 10.3, and the South East dropped from 9.7 to 9.1. Conversely, Northern Ireland bucked the national trend, with its ratio increasing from 5.8 to 6.0 as prices rose faster than wages.

In terms of affordability, parts of Scotland, such as Inverclyde and Aberdeen, were identified as some of the most affordable locations, with homes costing roughly 3.5 times average wages.