House prices have become more affordable in relation to salaries, data from Lloyds Banking Group shows.
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data → become → Group
The average home now costs 7.3 times the average household income, down from 7.6 a year ago, Lloyds said.
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Lloyds → cost → 7.6
The ratio has reached its lowest level since 2015, driven by slow house price growth.
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ratio → reach → growth
Nationally, the average property price edged up 0.5 per cent in the past year, to £299,131, while average earnings increased by 4.5 per cent to £40,790, narrowing the gap.
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earnings → edge → gap
For first-time buyers, homes now cost less than six times earnings, falling from 6.1 to 5.9.
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homes → cost → 5.9
Conventionally unaffordable regions have seen some of the largest improvements in house price to income ratio, though London and the south-east of England remain the most expensive places to buy.
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London → see → England
Scotland and northern England feature many of Britain's most affordable local authorities, led by Inverclyde and Aberdeen, according to the research.
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Scotland → feature → research
The gap between house prices and earnings has narrowed, new data shows
Where are the most affordable locations in each region?
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locations → narrow → region
At a local authority level, significant differences in house price affordability remain.
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differences → remain → affordability
Many of the lowest house price to earnings ratios are found in Scotland and northern England.
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Many → find → Scotland
These are the locations where buyers are likely to get more for their money.
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buyers → get → money
Inverclyde and Aberdeen in Scotland are the most affordable locations, with the average home costing 3.5 times earnings in both areas.
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home → cost → areas
The next cheapest locations are Kingston upon Hull in Yorkshire and the Humber, as well as Blackpool and Dundee, where homes cost 3.6 times earnings.
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homes → cost → earnings
At the other end of the scale, Elmbridge in Surrey remained the least affordable local authority with a house price-to-income ratio of 17.4.
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Elmbridge → remain → 17.4
Kensington and Chelsea in London followed at 17.3, while St Albans ranked third at 14.1.
Lloyds
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Albans → follow → 14.1
said: 'Several traditionally expensive areas recorded some of the largest improvements in affordability, including Westminster (London), where the ratio fell from 15.2 to 13.3; Cambridge (Eastern England), from 11.4 to 10.0; Elmbridge (South East), from 18.7 to 17.4; and New Forest (South East), from 10.1 to 8.7.
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ratio → say → 8.7
Conversely, several more affordable areas saw their ratios increase.
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ratios → see → ?
Rossendale recorded the largest increase from 4.8 to 5.4, while Wrexham in Wales increased from 4.9 to 5.5 and Halton from 5.1 to 5.6.
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Wrexham → record → 5.6
Buyers looking for a more affordable option in the south-east of England should consider Portsmouth, where the house price to income ratio is 5.2 and the average cost of a home is £216,713.
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cost → look → home
Asaam said: 'Where you buy continues to make a huge difference to affordability.
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buy → say → affordability
Our recent research showed homebuyers can save 28 per cent on average by looking just next door to the UK’s priciest postcodes.
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homebuyers → show → postcodes
Mortgage rates rising
The data will be of little comfort to buyers facing higher borrowing costs as mortgage rates increase.
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rates → rise → costs
Households are being hit with a fresh wave of mortgage rate hikes this week as lenders prepare for higher inflation and interest rates.
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lenders → hit → inflation
Higher interest rates mean average monthly mortgage repayments have increased from an average of £1,100 to £1,157 over the past year according to Lloyds.
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repayments → mean → Lloyds
The average first-time buyer mortgage payment now accounts for around 34 per cent of income, compared with 41 per cent for those renting.
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payment → account → those
And in some parts of the UK potential buyers are still being kept out of the housing market due to house prices being much higher than average incomes.
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prices → keep → incomes
Andrew Asaam, mortgages director at Lloyds, said: 'There are some encouraging signs for people looking to buy a home.
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Asaam → say → home
Wages have continued to rise while house prices have remained relatively stable, helping to narrow the gap between earnings and house prices.
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prices → continue → earnings
'However, affordability remains stretched for many households.
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affordability → remain → households
Mortgage rates are higher than they were a year ago and saving for a deposit continues to be one of the biggest barriers facing first-time buyers.
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saving → save → buyers
'Buyers may have more options than they realise, including mortgages designed for those with smaller deposits.'
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they → have → deposits
Ian Harris, president of NAEA Propertymark, said: 'While the narrowing gap between house prices and earnings is encouraging, affordability on paper does not always translate into affordability at the point of purchase.
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affordability → say → purchase
'Buyers are still facing higher borrowing costs and the challenge of raising a deposit, with many having to compromise on property type, location or budget.'
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many → face → type
The Aporia
