House prices across Britain vary drastically and, as a new study has revealed, in some areas a house will cost you 14 times your salary.
loveMoney has analysed figures by the Office for National Statistics (ONS) and found that Northern Ireland is the UK’s cheapest place to buy a home whilst a home in London will cost you the most.
The study analysed ONS figures of average salaries in every region across the UK and measured them against the same region’s average house price.
The house price affordability was then calculated by dividing average house prices by the average annual salary to receive an affordability value.
Northern Ireland was named the most affordable place to buy a home with the average salary accounting for 20.76% of the average house price. Second on the list was England’s East, where the average salary covers 20.55% of the average house price. Next on the list was Scotland with an affordability ratio of 19.45%.
London, probably not very surprisingly, remained the least affordable region to live in the UK. On average, an annual salary will only cover 7.14% of the property price in the capital. Which, in other words, means it would require 14 annual salaries to purchase an average home in London.
Homes are out of financial reach for families
The growing gap between house prices and salaries reveals how home ownership is moving further out of reach for many families across the UK.
Graeme Brown, interim chief executive at housing charity Shelter, says: “This is because the enormous cost of land means developers make big compromises on the quality and affordability of the homes they build, to ensure they make their money back.”
“While it suits landowners and land traders fine, ordinary families pay the price. Nothing is going to change until the government calls time on this rigged system.”
Whether and how the Government can help improve the situation still remains to be seen. However, initiatives like the Help to Buy scheme and changed to regulations announced in the Housing White Paper may be the first step in the right direction.