Housing affordability static in 2018: ONS

Housing affordability in England and Wales last year remained static, following five years of declining affordability, according to the office for national statistics.

Data collected by ONS shows that between 2017 and 2018, the affordability ratio increased by 0.8 per cent.

The price paid for properties rose by 3.3 per cent between 2017 and 2018, and earnings increased by 2.6 per cent.

On average a full-time worker can expect to pay an estimated 7.8 times their annual workplace-based earnings on purchasing a home in England and Wales, the data goes on to show.

Copeland, in the North West of England, was recorded as the most affordable local authority in England and Wales last year, with house prices being 2.5 times the average workplace-based annual earnings.

Meanwhile, the Kensington and Chelsea borough was the least affordable area in 2018, with average house prices being 44.5 times the average workplace-based annual earnings.

Furthermore, the data shows that there were 77 local authorities which became less affordable over the last five years, with the majority being in London, the South East and the East of England.

ONS adds that there were no local authorities in which affordability improved within the same time frame.

Wagestream co-founder and chief executive Peter Briffett comments: “There has been no improvement in affordability and it is wrong to think this burden falls most heavily on the young.

“High house prices represent the ultimate false economy, a suit of armour that makes owner-occupiers feel invulnerable but can actually cause them more financial stress.

“While people sleep easier in their beds in the belief they have made a great investment, bumper property prices feed into every area of our lives.

“Homeowners are also vulnerable to interest rate rises as monthly mortgage costs absorb a large chunk of their wages, and they have very little wriggle room if rates start to creep up.

“The overall housing picture remains one of disproportionately high pressure on households created by housing costs.”

Yomdel chief executive Andy Soloman says: “An almost static movement in the rate of housing affordability is, in some ways, positive news for UK home buyers and one consequence of a bodged Brexit process that we can chalk down as a win of sorts.

“However, while the rate of unaffordability has slowed significantly since 2013, this slowdown is coming off the back of five years of a progressive unaffordability which somewhat takes the shine off today’s news.

Private Finance director Shaun Church adds: “While housing affordability may have remained relatively unchanged over the past year, it is important to recognise that mortgage affordability has improved considerably.

“The upfront cost of purchasing a home undeniably remains a significant financial hurdle for first time buyers to overcome, however, thanks to falling mortgage rates, the ongoing cost of owning a home and servicing a mortgage is in fact more affordable than it was ten years ago.”

Coreco director Andrew Montlake comments: “For anyone trying to get on the ladder in London, these figures are a stark reminder of just how difficult it is… unless you’ve got a sizeable deposit and a pretty decent income, buying in the south east corner of the UK is little more than a pipe dream.”

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