It's Now More Affordable To Buy A House In These Expensive Areas
The country's most expensive locations have just become a little more affordable than before.
According to Zoopla, the affordability of purchasing a property in the likes of London, Oxford and Cambridge has significantly increased, when compared to just four years prior in 2015.
The average property price in London, for instance, currently stands at £483,000 – 13.1x the average local’s earning. Two years ago, it would have cost a Londoner 14.1x their average earnings to buy a property locally. That’s a 1.0 reduction in price.
When you factor in growth in average earnings, these normally super pricey areas are now even more ‘affordable’ (for those with some serious savings to spare, of course! We have to remember that despite this modest improvement, the London ratio today remains well ahead of the 20-year house price to earnings ratio average of 9.9x).
In other expensive cities, Cambridge and Oxford, where house prices now sit at 12.2x and 11.9x average earnings respectively, there has been a similar improvement, with affordability levels back to those seen in mid-2015.
Interestingly, lower-priced cities in northern England are actually getting less affordable, as house prices are outstripping earnings growth. In London and other more expensive southern locations, house price growth is weak, while earnings are increasing.
These figures are based on Zoopla’s UK Cities House Price Index for July 2019, which calculates the ratio of house prices to average earnings at a city and national level to look at trends in housing affordability.
Which areas are now more affordable to buy a property in?
House price growth is currently stalled in:
What do these findings mean for potential home buyers?
It’s important to understand that these areas may not be suitable for all budgets. However, if you were considering purchasing a property in the likes of London or Oxford, now might be the best time to hop onto the ladder. The property market is unpredictable, so it’s always a good idea to take advantage of certain peaks and dips, depending on whether you’re looking to buy or sell a house.
If you’re interested in selling a property, it may be a good idea to wait until property prices pick up in some of these prime locations.
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Content correct at time of publication.