According to a new report from Lloyds TSB, since 2008 buying a house and home affordability has improved by almost a quarter.
The report says that in 2008 a home in an urban area cost 22% more than it does now – it now costs approximately £34,831 less for a house. The report by Lloyds called the Lloyds Affordable Cities Review included 61 British cities and looked at the annual earnings and house prices in each area to quantify which are able to gain the correct stability.
The average price of a city home in the United Kingdom this year comes at £172,556 which is just over 5 and a half times more than our gross average yearly salary of £30,794.
In 2008 the figure was £28,879 (7.2 times more than our earnings) and the average urban home in the UK cost £207,387. The right amount is around 4 times our earnings so are still way off that figure.
According to the report the top 3 most affordable places in terms of price to earnings ratio, include Londonderry , Lisburn and Belfast all in Northern Ireland. Others in the top 10 include Stirling in Scotland, Bradford in Yorkshire, Salford in the North West, Glasgow, Lancaster, Hull and Sunderland.
House prices in Londonderry Northern Ireland have dropped since the beginning of the economic downturn and is now the most affordable city to buy a home in the UK where the average price of a property is £94,776.
BBC’s new home, Salford is also listed in the top 10 most affordable homes in the UK.
Looking at the least affordable places in the UK, Oxford tops Lloyds TSB’s list with the following cities being Oxford, Salisbury, Bath, Truro, Winchester, Brighton, Cambridge, Chichester, Exeter and St. Albans.
The average price of a property in Oxford comes in at about £299,459 which is nearly 10 times the gross average annual salary.
London comes in at 11th on the list. Most people would expect it to be top but if comparing each of the boroughs in London, house prices and earnings can be significantly different e.g. if you compare Chelsea to Greenwich.
Many landlords will be looking at the most affordable housing as well as the demand in these areas for their next projects, but will be taking into account the potential value of their investment and any other costs such as tax, landlord insurance policies, renovation costs and other fees involved.