New figures have shown that urban house prices continue to outpace earnings growth to make Oxford the UK’s least affordable city to live in, reports the Independent.
If the hustle and bustle of the UK’s diverse and lively cities are your idea of property heaven, the chances of getting on the housing ladder just got even further away, new data has revealed, with the average city house price now coming in at around £225,000.
That’s a rise of almost a third from £170,000 in 2012, despite average city annual earnings over the same period coming in at only 7 per cent higher – around £32,800, according to Lloyds Bank’s Affordable Cities Review.
It means home affordability across UK cities is now at its worst level since the financial crisis of 2008. In fact, prices in Greater London are up by 57 per cent in the last five years alone, but it’s among the spires of Oxford where your money stretches the least.
The average house price in the famous university hub is now more than £385,000 – nearly 11 times the £36,000 annual gross average earnings in the city. It’s a similar story in Greater London, Winchester, Cambridge and Chichester, where property will typically set you back more than 10 times the average salary for those areas.
But it’s St Albans that has recorded the highest price rise of any UK city over the last decade, recording an average increase of 65 per cent.
At the other end of the scale, it’s no great surprise that the 20 most affordable cities are all outside southern England with Stirling, the former Scottish capital, offering buyers homes at an average of £174,000 – less than four times average gross earnings for the region. Londonderry in Northern Ireland is the UK’s second most affordable city. Others include Belfast, Bradford, Sunderland, Durham, Glasgow and Swansea.
Meanwhile, the paper also reports that young people on modest incomes face the prospect of never being able to afford to buy a property.
Nine out of 10 Britons on modest incomes under the age of 35 won’t ever be able to afford homes within a decade, according to a study by a leading thinktank.
The Resolution Foundation’s analysis shows that property ownership is projected to become increasingly restricted to wealthy and older households, laying out a bleak future for millennials.
The thinktank’s findings show only a quarter of people aged 16-34 living in households with incomes “between 10 per cent and 50 per cent of the national average” bought their own homes in 2013-14. In 1998, more than half of that group were able. On current projections, the figure is on course to be 10 per cent across the UK as a whole by 2025 and just 5 per cent in London.
Matt Whittaker, chief economist at the Resolution Foundation, said:
“With the average modest income household having to spend 22 years to raise the money needed for a typical first time buyer deposit – up from just three years in the mid-1990s – it’s no surprise that owning looks so out of reach.”
“If we want to see an increase in working families being able to afford to buy, it is essential that the housing shortage is tackled by the government.”