Low-income households are being priced out of homeownership in all four countries of the UK as the averagely priced home, with a price tag of £298,000, is equal to eight-and-a-half years’ earnings.
The Office for National Statistics’ (ONS’) Housing Purchase Affordability, UK: 2023 revealed that only the 10% highest income households in England could afford an averagely priced home with fewer than five years of household income last year.
Five years is the broad indicator the ONS uses to gauge house purchase affordability.
In Wales, this was the top 30%, while it was the top 40% in Scotland. In Northern Ireland, an averagely priced home was affordable with an average household income. All countries were unaffordable for low-income households.
In London, the average home was not affordable for any household income group.
The average house price to disposable household income ratios were 5.8 years in Wales, 5.6 in Scotland and 5.0 in Northern Ireland in FYE 2023.
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Since the ONS series began, house prices have increased twice as quickly as household incomes in England. House prices in Wales and Scotland have also increased more rapidly than incomes, but the differences are more moderate.
In Halifax’s latest Affordability Review, published last month, the house price to income ratio improved marginally from 6.62 last year to 6.55 this year, as wage growth surpassed house price growth.
This compares to the record-high ratio of 7.24 in the summer of 2022.
