In 2022, full-time employees in England could expect to spend around 8.3 times their annual earnings on buying a home, while the equivalent figure in Wales was 6.2 times their annual earnings, according to data from the Office for National Statistics (ONS).
Out of the 330 local authorities (LAs) in England and Wales, housing affordability improved in 235 (71%) since 2021, worsened in 89 (27%), and remained the same in the remaining 2%.
Over the last 25 years, housing affordability has worsened in every LA, particularly in London or surrounding areas.
In 1997, 89% of LAs had an affordability ratio of less than five times workers’ earnings, whereas only 7% had this level of affordability in 2022.
The most affordable area in London was found to be less affordable than the least affordable area in the North East.
The affordability ratio of lower earnings to lower-priced homes is better than the affordability ratio of median earnings to median-priced homes (7.2 compared with 8.3).
HM Land Registry data for January 2023 shows that average house prices in the UK increased by 6.3% in the 12 months to January 2023, down from 9.3% in the 12 months to December 2022.
In the past two years, affordability ratios in Wales have shown a less pronounced increase and decrease than in England.
Between the 12 months ending September 2021 and the 12 months ending September 2022, the average price of homes sold in England and Wales fell by £9,000 or 3%, while average earnings increased by £1,800 or 6%.
