Average house prices in the UK are 7.1 times typical earnings

The research was based on data from the Halifax house price index, which compared typical house prices to average earnings across the UK.

Danielle Desouza
Friday 24 June 2022 19:01 EDT
House prices are up 16.8% since the start of the pandemic (Andrew Matthews/PA)
House prices are up 16.8% since the start of the pandemic (Andrew Matthews/PA) (PA Wire)

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

House prices continue to rocket, with a typical UK home now costing more than seven times average earnings.

Research from mortgage lender Halifax found that a typical UK home is 7.1 times average earnings.

Since the start of the pandemic in 2020, house prices have risen by 16.8% from £239,281, with earnings rising by 2.7% from £38,374.

In the first quarter of 2022, the cost of an average home in the UK was £279,431, while annual average earnings of a full-time worker were estimated to be £39,402.

London was found to be the most expensive place to buy a home, with an average property price of £534,977 and house price to earnings ratio of 9.7.

Westminster and the City of London, however, witnessed the sharpest improvement in the house price to earnings ratio since the start of the pandemic, with a drop from 16.8 in early 2020 to 14.5 in 2022.

This is a sign of increasing buyer demand for larger properties in less urban locations, Halifax suggested.

On the other hand, the North East of England was ranked as the most affordable region for home buyers, with an average house price of £162,692 and house price to income ratio of 4.6.

House prices in the North East of England are also more affordable than they were in 2007, when the ratio was 5.8.

In Inverclyde in the west of Scotland, house prices were 3.1 times average earnings – making it the most affordable place to buy a home in the study.

Westminster and the City of London were identified as the least affordable areas to buy a home, despite the recent improvement in affordability.

Despite the rising cost of housing, market activity suggests that many are still considering a move, which could be due to joint applicants being able to make use of two salaries.

The research also discovered that the average age of a first-time buyer is 32 – three years older than a decade ago – and that many in this category will be joint applicants who have two wages to support housing costs, which may include funds from the “bank of mum and dad”.

With interest rates on the rise as a means of combatting inflation, it’s unlikely that house prices will continue to grow at the pace we’ve seen recently. This should see the gap between average earnings and property prices over time

Andrew Asaam, Halifax

Andrew Asaam, mortgages director at Halifax, said: “With interest rates on the rise as a means of combatting inflation, it’s unlikely that house prices will continue to grow at the pace we’ve seen recently.

“This should see the gap between average earnings and property prices over time.”

The Bank of England base rate stands at 1.25%, the highest since January 2009.

The research was based on data from the Halifax house price index, which compared typical house prices to average earnings across the UK.

Here are average house price to earnings ratios across the UK in the first quarter of 2022, according to Halifax:

– London, 9.7

South East, 9.3

– East of England, 8.5

– South West, 8.4

– East Midlands, 6.8

– Wales, 6.5

– West Midlands, 6.5

– North West, 6.1

– Yorkshire and the Humber, 5.4

– Northern Ireland, 5.1

– Scotland, 5.1

– North East, 4.6

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in