House prices may have increased last year but affordability has improved.
Figures from the Office for National Statistics (ONS) show affordability in England and Wales in 2024 returned to its pre-pandemic levels after a sharp rise in homes being unaffordable between 2020 and 2021.
In 2024, the median average home in England, at £290,000, cost 7.7 times the median average earnings of a full-time employee (£37,600).
In Wales the average home (£201,000) was 5.9 times annual earnings (£34,300).
It comes as median house sales prices have increased by 1% since 2021, while average earnings have increased by 20%, the ONS said.
In 2024, 9% of local authorities (LAs) (27) had homes bought for less than five times workers’ earnings on average and were therefore deemed affordable; this is the highest proportion since 2015, but well below that at the start of the series in 1997 when it was 88% of areas.
Housing affordability improved in 289 of the 318 LAs in England and Wales (91%) and worsened in 28 (9%) since 2023.
The most affordable LAs in 2024 were Blaenau Gwent (with a ratio of 3.8), Burnley (3.9) and Blackpool (3.9); the least affordable was Kensington and Chelsea (27.1, which was about seven times less affordable).
Between 2019 and 2024, four of the 10 largest increases in affordability ratios (worsening affordability) were in the East Midlands, while the 10 largest decreases in affordability ratios have all occurred in LAs in London.
Commenting on the figures, Toby Leek, president of NAEA Propertymark, said “It’s encouraging to see that overall housing affordability has increased year on year. As many people battle increases in ongoing expenses, it’s positive to see that this easing counteracts some of those pressures and allows home ownership aspirations to continue for many people.
“Notably more so in England, the affordability ratio has decreased significantly, with areas from up and down the country becoming more affordable allowing people across the country to step onto the housing ladder or move home more easily.
“In Wales, affordability has notoriously been better than across other areas of the UK, therefore, to see this further improve in 2024 is great news.
“However, ongoing issues remain, especially for first-time buyers as the average deposit needed to enter the market and take advantage of more competitive mortgage deals currently sits at around £50,000 which is out of reach for many people.
“Alongside this, interest rates are higher than what many are used to witnessing, which continues to place additional pressure on finances. Government-backed schemes are needed for first-time buyers moving forward and once inflation, and in turn interest rates, continue on their downward path, we hope this also offers the extra boost many other people need in order to work toward their home ownership goals.”
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