The average house price in the UK is eight times the typical wage, according to online estate agent eMoov.co.uk.
The agent has found the most unaffordable parts of the UK where house price to wage ratio is concerned. It has compiled data for all London boroughs, and each area across England, Scotland and Wales, calculating the most expensive and cheapest areas for buying property when compared to income.
Unsurprisingly, the majority of the most expensive areas are in London, where the average house price climbs to 14 times the typical wage.
Average House Price is Eight Times the Typical Wage in the UK
The Royal Borough of Kensington and Chelsea tops the list, with an average house price of £1,212,375, despite suffering the greatest decline in property values in the capital over the past year, of 6%. The cost of buying a home in the borough is now 46 times the average wage, of £26,624, and the nation’s greatest gap in property prices to wages by far.
The City of Westminster is second on the list for the most expensive property price to income, where the typical property costs £1,028,617, up by 11% annually. With an average wage of £33,020, house prices in the borough are 31 times higher than earnings.
Richmond upon Thames, also in London, placed fourth on the list, with the average house price (£659,636) a huge 26 times the typical wage (£25,636).
Looking at England as a whole, the average house price is nine times the typical wage on offer. The most expensive city outside of London and third place overall is St Albans in Hertfordshire, where the average house price (£522,716) is 28 times higher than typical earnings (£18,928).
The second most expensive location outside the capital is South Bucks in Buckinghamshire, where the house price to wage ratio is 25. Workers on an average income of £23,192 are faced with the challenge of buying a property costing £587,645 in the area.
Chiltern, close behind South Bucks, has a wage to house price ratio of 24, with a typical property value of £512,910.
In Wales, the lower average property value means that the gap between prices and wages is just six times. Monmouthshire is home to the highest average house price to wage ratio in Wales (12), but is only ranked 153rd overall in the UK, with a typical property price of £221,345.
With house prices also lower in Scotland, the price to wage ratio is just five. The most expensive Scottish region is East Renfrewshire, despite placing 113th in the whole of the UK. The average wage in the area is 13 times lower than the typical house price.
The City of Edinburgh placed second in a three-way tie (along with East Dunbartonshire and East Lothian) for unaffordability in Scotland, but is ranked just 210th throughout the UK. It would take ten times the average wage in the Scottish capital to buy a home there.
In contrast, Copeland in western Cumbria is the most affordable part of the UK, with a property price to wage ratio of just three. Blaenau Gwent in Wales follows closely behind, at four times, with Burnley in Lancashire also at four.
The Founder and CEO of eMoov, Russell Quirk, comments on the findings: “Property values in England are significantly higher than the rest of the UK, which is reflected in the wages offered. However, the wages are not always consistent with property prices, and have failed to increase at the same pace.
“It highlights the unaffordability of the market in England when you consider the difference in Wales, where the highest annual average wage is under £21,000 in Cardiff, yet the city’s property value is merely third in the country, behind regions with lower averages in annual incomes. Additionally, the average wage in Kensington and Chelsea would take almost a lifetime working to be able to afford a home, which is unrealistic for most, let alone the average buyer.”
He adds: “It is important to consider the wage you can earn when buying property, to understand the longevity of the investment, as a lower property price doesn’t always mean a better quality of living, as the wage will also reflect the local market and economy.”