Widening affordability gap between England and rest of Britain, says ONS
House buying affordability lessened considerably in England last year and is now worse than at any point since 1999, when records began, according to the Office for National Statistics (ONS).
The ONS housing purchase affordability data shows the median house price in England in the year to 31 March was £275,000, equivalent to 8.7 times the median income of £31,800. This was a sharp increase on the 8 times income reported in 2020/21 and means affordability ratios are now higher than the previous peak of 8.2 times income reported in 2008 during the global financial crisis.
The affordability ratio in England has nearly doubled since 1999, when median house prices were just 4.4 times average incomes.
While England’s affordability ratio increased 8.8% year-on-year, Wales’ increased 5.4% to a much lower ratio of 6, while Scotland’s remained steady year-on-year at 5.49.
Source: ONS house purchasing affordability statistics
ONS said: “Ratios in England have increased and are now beyond their 2008 peak, resulting in an increased affordability gap between England and the other two countries”
See also>> Are we seeing the start of a housing development slowdown?
Earlier this month the Halifax reported house prices rose for a 12th consecutive month in June, as the market ‘defied’ expectations of a slowdown.
However price increases are widely expected to slow later this year or in 2023. Research consultancy Capital Economics in April predicted prices to peak later this year before dropping by around 5% in 2023 and 2024.
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